Optional Employee Contributions
Now that I'm a YWCARF participant, can I make additional contributions to my account?
Yes! To increase your future retirement benefit, you may choose to make optional after-tax contributions through monthly payroll deductions by your association.
You can authorize payroll deductions at any time by submitting a completed Authorization for Optional Employee After-Tax Contributions form to your payroll department.
How much am I allowed to contribute?
You may make contributions in one of two ways. The first is an amount expressed as a percentage between 1% and 10% of your gross compensation. Alternatively, you may designate a whole dollar amount that is between 1% and 10%.
Do I have to commit to optional contributions for a fixed time period?
No, you may discontinue making optional after-tax employee contributions any time you wish. However, you must notify your association by submitting an updated Authorization for Optional Employee After-Tax Contributions form to the payroll department.
Are all active participants eligible to make optional contributions?
No, in accordance with the law, participants who are considered "highly compensated" may not make optional after-tax employee contributions.
A participant who made more than $130,000 in 2021 is deemed a highly compensated employee in 2022. The IRS adjusts this limit annually.
Are my contributions taxable?
Optional employee contributions are made on an after-tax basis. However, interest earned on optional after-tax employee contributions is taxable. When you receive a distribution, the interest that has been credited will be taxed.
What are catch-up contributions?
If you do not, or did not, make maximum optional after-tax employee contributions in prior years but wish to do so, you may make "catch-up contributions." These are made directly to YWCARF in a single sum.
How much am I able to contribute?
Contact our Member Services team. They will calculate the allowable amount for you.
Designating a Beneficiary
What is a beneficiary?
Your beneficiary is the person or trust that will receive your benefits when you die. You can name any person or trust, but if you are legally married your spouse is automatically your beneficiary.
Can I name someone other than my spouse as my beneficiary?
If you want to name someone other than your spouse as your beneficiary, federal law requires that your spouse provides written consent to your designation - witnessed by a notary public. Your spouse's consent is irrevocable.
If your spouse does not provide written consent, federal law requires YWCARF to pay 50% of your account to your surviving spouse in the event of your death (regardless of whom you named as beneficiary).
Elections to waive the required spousal death benefit are not permitted until the plan year in which you reach 35 years of age. The remaining 50% will be paid to the beneficiary that you have designated.
What happens to my account if I do not name a beneficiary?
If you are married, the entire account will be paid to your spouse. If you are unmarried, it will be payable to your estate.
What qualifies as military leave?
Military service is defined by law to mean active service, including training and inactive duty for training in the U.S. Armed Forces, the National Guard, or the Public Health Service. To qualify for military leave you must be leaving employment with a participating association solely for this purpose.
What happens to my YWCARF account when I return from military service?
If you return to active employment within the time period specified under the applicable law, then it is considered to have been an approved leave of absence. You will receive pay credits, match credits, and interest credits to your account as if you had been working full-time for a participating association.
What if I went on military leave before I was eligible to participate in the Fund?
If you were not yet a participant before your military leave, that time will be counted toward satisfying your eligibility requirements – as if you had been working full-time for a participating association.
Qualified Domestic Relations Orders (QDROs)
What is a QDRO?
A QDRO is any judgment, decree, or order that provides for child support, alimony, and/or property rights to a spouse, former spouse, child, or other dependents of the participant under state domestic relations law, including community property law.
If I get divorced, can my former spouse receive any of the money in my YWCARF account?
Yes. A state court can divide the value of your account between you and your former spouse. The amount is determined by what you and your former spouse agree upon and what is approved by the court.
How are the terms of a QDRO determined?
A QDRO must meet certain plan and administrative requirements to be honored by the Fund. If you are a participant and have a QDRO pending, please contact our Member Services team before the QDRO is made a final order of a court to confirm the QDRO's validity.
What happens after a QDRO is approved?
An account is set up for the former spouse, who will be considered much like a terminated employee. The former spouse is entitled to do any of the following with their account.
•Receive a lump-sum payment minus 20% federal income tax.
•Roll over the account to another employer's plan or IRA.
Terminating Your Employment With a YWCA
What happens to my YWCARF account if I leave employment with my YWCA?
Since you are already 100% vested in your account you will have several options. You can choose to receive all or part of your account or you can leave it with us until you reach 72.
What are my payment options if my account value is greater than $5,000?
If your account is greater than $5,000 you can receive:
•50% or 100% of your total account value paid as a lifetime monthly annuity.
•50% or 100% of your total account value paid in a lump sum that can be rolled over to another employer's plan, to an IRA, or directly to you.
What are my payment options if my account value is less than $5,000 but greater than $1,000?
You may still receive either 100% or 50% of your account as a lump sum that can be rolled over to another employer's plan, to an IRA, or directly to you. Only accounts with a balance of $5,000 or more qualify for annuity.
What if my account value is $1,000 or less?
You will automatically receive a single lump-sum payment after you retire or terminate, unless you instruct us prior to the distribution to roll over the account to another employer's plan or to an IRA.
Are there any special rules if I have made optional after-tax contributions?
Yes. You may request a distribution of your optional account only. But if you choose to commence receipt of either 50% or 100% of your regular account you must also withdraw your optional account at the same time.
How do I apply for a distribution from my account?
Will I have to pay taxes on the money I withdraw?
Generally, the money you receive from YWCARF is subject to taxes. However, if you choose the lump-sum payment option, and do not roll over the proceeds of your account to an IRA or another employer's retirement plan, the refund will be subject to 20% federal income tax withholding. In addition, you will likely be subject to a 10% tax when you file your federal income tax return if you terminate your employment before the year you turn 55.
What if I choose to leave my account with YWCARF until a later date?
All employee accounts are 100% vested. After you terminate your employment with a YWCA you may leave your account with us until you reach age 72, and it will continue to earn monthly interest credits.
If I leave my account with YWCARF how will I know what the balance is?
We will send you an annual Statement Of Account. You will generally receive it in February of the following year. It is extremely important that you keep your current address on file with us. If we can't locate you, we can't mail your statement.
Can I continue to participate in YWCARF after leaving YWCA employment?
No. YWCARF is a benefit that is only provided to active employees of YWCAs within the U.S.
Retiring from The YWCA
What is an annuity?
It is a monthly payment made to you for life when you retire.
How are annuities calculated?
The exact amount of your annuity depends on your age, the value of your account, the annuity option you choose, and the annuity purchase tables in effect for YWCARF at the time. The annuity purchase tables are based on mortality and interest rate factors. Because the interest rate is market-based and can fluctuate from year to year, your account will provide different levels of annuity benefits depending upon the year in which you choose to begin receiving your annuity.
Can my monthly payment ever decrease?
No. All payments are guaranteed for life.
When may I start to receive my monthly annuity?
You may begin receiving a lifetime annuity at any age after you leave YWCA employment. You must have a minimum account balance of $5,000. You will begin receiving payments shortly after you have submitted all the required forms and documentation.
How do I apply for my monthly annuity?
Contact our Member Services team to request an options package. We will send you a letter that details all your retirement options plus the forms you need to get started.
Can I begin receiving my monthly annuity while still employed?
Yes, but you must be age 65 or older.
Can I select an annuity that will provide income to a beneficary after I die?
Yes. YWCARF has several annuity options that provide income to surviving beneficiaries. Some may provide lifetime income to a survivor beneficiary while others provide income for a fixed period of time.
What types of annuities are available?
We offer you a choice of six different annuities:
Straight Life: The straight life annuity is the normal form of payment for unmarried participants. If you are married, you must obtain your spouse's written consent to elect this option. This option pays only you and pays the largest benefit per month.
Joint and Survivor: Under federal pension law the 50% joint and survivor annuity is the normal form of payment for married participants. Under this option, the benefit you receive during your lifetime is reduced so that when you die your spouse or other joint annuitant will continue to receive monthly income for the remainder of his or her lifetime equal to 50% of the benefit payable during your lifetime.
You can assign an additional beneficiary to receive the remainder of your decreasing death benefit, if any, after the death of the annuitant and the survivor annuitant. In addition to the 50% survivor option, you can also elect to have either 75% or 100% of the benefit paid during your lifetime continued for your spouse or other joint annuitant. A larger survivor annuity percentage will result in a more significant reduction in the benefit payable during your lifetime. If you are married, your account exceeds $5,000, and you elect a payment option other than a 50%, 75%, or 100% joint and survivor annuity with your spouse as the survivor annuitant, a notarized spousal consent is required in order for the election to be valid.
Period Certain and Life: You elect a specified period of 5, 10, or 15 years to assign a monthly annuity benefit to your designated beneficiary. If you die within the period you elected, your annuity payments will be assigned to your designated beneficiary for the remaining period. When that period ends, the payments to your beneficiary will cease. If you outlive the period you elected, your annuity payments will continue for the remainder of your lifetime. If you are married, to designate someone other than your spouse, a notarized spousal consent is required.
Modified Cash Refund: This annuity offers an initial decreasing death benefit based on approximately one half of your account value. Upon your death, your beneficiary receives a single sum payment minus the total annuity payments you received. If the total of your annuity payments exceeds the initial decreasing death benefit, your designated beneficiary will not receive a single sum payment from the Fund. If you are married, to designate someone other than your spouse, a notarized spousal consent is required.
Full Cash Refund: This annuity offers an initial decreasing death benefit based on your total account value. Upon your death, your beneficiary receives a single sum payment minus the total annuity payments you have received. If the total of your annuity payments exceeds the initial decreasing death benefit, your designated beneficiary will not receive a single sum payment from the Fund. If you are married, to designate someone other than your spouse, a notarized spousal consent is required.
Fixed Death Benefit: You provide us with the amount you would like to set aside for your designated beneficiary. The amount you choose cannot be greater than your account balance. The death benefit remains fixed, while your remaining account balance is annuitized. If you are married, you must obtain your spouse's notarized written consent to elect this option.
After I have selected my annuity option and begun to receive payments, can I change my mind?
No. The annuity election that you submit is irrevocable and cannot be changed.
How will I receive my monthly annuity?
The safest and most reliable method is through Electronic Funds Transfer (EFT). We will automatically deposit your monthly payment into a bank account of your choosing.
Will I have to pay taxes on my monthly annuity income?
Yes. The association contributions, 40% funds match, and the interest credits to your account will all be taxed in accordance with IRS guidelines. Optional after-tax employee contributions have already been taxed, so this portion of your monthly payment will not be taxed again.
Can I continue to collect my monthly annuity if I return to work at a YWCA?
Yes. You will continue to receive your monthly annuity payments. You will also automatically begin participating in the Fund again and will receive contributions into your account based upon the contribution rate of your association and your current salary. If you are age 65 or older, you will be given the choice to receive your newly earned benefits or to defer them until a later date.
What happens to my account if I die before receiving benefits?
If you die before you begin receiving payment from your account, the total value of your account will be paid to your spouse or another designated beneficiary. If you have been a participant of the fund for at least six months and die while actively employed by a participating association, or within 60 days following termination or going on unpaid leave, the death benefit paid on your behalf will not be less than $5,000, not counting any optional after-tax contributions you make and the interest credits on those contributions.
Please note: The minimum death benefit does not apply if your account ever exceeded $5,000.
What happens if I die while receiving monthly annuity?
If you die while receiving monthly annuity payments, your spouse or other designated beneficiary will be entitled to a death benefit only if the annuity option you selected provides for one.
Loans and In-Service Hardship Withdrawals
Can I borrow against or withdraw money from my account?
No. As a defined benefit plan, YWCARF does not permit loans or in-service hardship withdrawals.
Where can I access the forms I need to update and manage my account?
From updating your information and designating a beneficiary, to electing your monthly annuity and more, find all the forms you need here.