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BackDROP Options
Hi Folks, Just wondering if a person earns Backdrop time, if they can cash out some of their Backdrop and roll over the rest into Deferred Comp, CD"s etc? Thank you.
Yes, if you are eligible for and elect BackDROP, you have three options for your BackDROP lump-sum payment:
- Cash Option: This is either one lump-sum payment at retirement or three annual installments. From any amounts paid in cash, we will deduct 20% for federal income tax (as required by the IRS) and any Missouri state income tax withholding you choose. You will be responsible for any IRS early withdrawal penalties that may apply.
- Rollover Option: We will send your tax-deferred distribution directly to a qualified employer plan, such as Mo Deferred Comp.
- Combination Cash & Rollover Option: You can take a portion of the lump sum in cash (less 20% for federal income tax, as required by the IRS, and any Missouri state income tax you choose to have withheld) and roll the rest over to a qualified employer plan. You will be responsible for any IRS early withdrawal penalties that may apply.
MO Deferred Comp is a qualified employer plan and you may be able to roll over your funds to them. Before you make any decisions, we recommend that you read the Special Tax Notice to ensure you understand the tax implications of your choice. We also encourage you to consult a tax professional. Read Thinking About the BackDROP? for more information.
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