City and County of San Francisco Deferred Compensation Plan

WITHDRAWAL AND DISTRIBUTION GUIDE

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The City and County of San Francisco helps you prepare for your future, both during and after your employment with us. There may come a time when you’ll need to make some decisions

about the savings in your Deferred Compensation

Plan (SFDCP) account. Please review each of the

distribution options on the following pages carefully

in order to choose the one that best fits your

financial needs. If you would like to discuss

your options, please call

888-SFDCP-4U (733-2748) or visit

the Contact Us page at sfdcp.org to

schedule an appointment with your

department dedicated SFDCP Counselor.

Your Withdrawal Options While You are Still Employed with the City and County of San Francisco

Your choices for withdrawals while you are still employed include:

• Loans

• De Minimis

• Rollover Sources

• Unforeseeable Emergency

Loans You may request a loan from your SFDCP account, with a limit of up to two outstanding loans at one time. You may only request one loan every 12 months.

• Minimum account balance to initiate a loan is $2,050 and the minimum available for withdrawal is $1,000.

• Available to active employees (including those on paid or partially paid leave).

• General purpose (maximum of two) and Residential (maximum of one) loans will be allowed.

• Amounts will be issued from all sources and amounts will be withdrawn prorata from all available funds (Note: A balance in the Self-Directed Brokerage Account must be transferred to core funds to be included in available loan proceeds).

• Loans may be repaid in full at any time.

• Loan Fees:

– One-time initiation fee: $50

– Expedited check fee (if applicable): $25

– Annual maintenance fee: $25 ($6.25 deducted quarterly)

De MinimisYou may request a one-time withdrawal available to active employees if you:

• Have an account balance less than $5,000.

• Have not taken a prior de minimis withdrawal.

• Have not had any deferrals into the SFDCP in two years prior to withdrawal.

All funds are available for withdrawal, except investments in the Self-Directed Brokerage Account (SDBA) and any amounts associated with an outstanding loan. Any balance in the SDBA must be transferred to core funds before a de minimis withdrawal can be processed. You must withdraw 100% of your account balance excluding rollover sources.

Rollover Sources You may request a withdrawal of assets you rolled into your SFDCP account, including any Rollover 457(b), Rollover Non-457, Roth Rollover Non-457, and Roth Rollover 457(b) money.

Unforeseeable Emergency WithdrawalsYou may request a withdrawal to satisfy an unforeseeable emergency, as determined by the SFDCP. Your withdrawal amount may not exceed the amount required to satisfy the documented unforeseeable emergency, plus any amount necessary to cover taxes due on the unforeseeable emergency withdrawal (UEW). You must exhaust all loan and withdrawal options to be eligible for this withdrawal type.

For more information on Unforeseeable Emergency Withdrawals and to request a form, please call 415-487-7500.

Purchasing Government Service CreditsSFERS may allow you to voluntarily purchase service for time previously worked or lost under certain conditions as a way to potentially enhance your retirement benefit. Purchased service can increase your total credited service. Please go to mysfers.org to determine if you are eligible.

Additional Distribution OptionsIn addition to the withdrawal and distribution options above, distribution of your benefits can be made under the following circumstances:

• Your funds may be withdrawn by an alternate payee under a qualified domestic relations order (divorce proceedings) once your account is divided in accordance with the court order.

• You may receive an in-service withdrawal after age 70½.

• Purchasing Government Service Credits

• Qualified Domestic Relations Order

• In-Service Withdrawals at Age 70½

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Your Distribution Options When You Leave Employment or Retire from the City and County of San Francisco

When you stop working for the City and County of San Francisco, you don’t have to take any immediate action with your money in the SFDCP.

You can continue to leave your money invested in the SFDCP. You are not required to start withdrawing from your account until you reach age 72. At that time, there will be a minimum amount that you must withdraw each year, as required by the IRS. The amount will be calculated for you, so always be sure your address is current on your account. If you need help developing your retirement income strategy, call 888-SFDCP-4U (733-2748) and ask to speak with a Voya Retirement Advisors Investment Advisor Representative.1 Whether retirement is right around the corner or still a few years away, they can help you understand how to coordinate your investments and benefits to generate income in retirement.

Your choices when separating or retiring include:

• Keep your money in the SFDCP and continue to invest it

• Set up periodic installment payments

• Take a partial withdrawal2

• Receive a total distribution2

• Invest in an annuity

• Roll your money over into a new employer’s retirement plan or an individual retirement account (IRA)

• Monthly Income+ payments3, which are available exclusively to members of the Professional Management Program.3

1 Advisory Services provided by Voya Retirement Advisors, LLC (VRA). VRA is a member of the Voya Financial (Voya) family of companies. For more information, please read the Voya Retirement Advisors Disclosure Statement, Advisory Services Agreement and your plan’s Fact Sheet. These documents may be viewed online by accessing the advisory services link(s) at SFDCP.org. You may also request these from a VRA Investment Advisor Representative by calling your plan’s information line at 888-SFDCP-4U (888-733-2748). Financial Engines Advisors L.L.C. (FEA/Financial Engines) acts as a sub advisor for Voya Retirement Advisors, LLC. Financial Engines Advisors L.L.C. (FEA) is a federally registered investment advisor and wholly owned subsidiary of Edelman Financial Engines, LLC. Neither VRA nor FEA provides tax or legal advice. If you need tax advice, consult your accountant or if you need legal advice consult your lawyer. Future results are not guaranteed by VRA, FEA or any other party and past performance is no guarantee of future results. Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All other marks are the exclusive property of their respective owners. FEA and Edelman Financial Engines, L.L.C. are not members of the Voya® family of companies. ©2018 Edelman Financial Engines, LLC. Used with permission.

2 Distributions from the Plan will be subject to 20% federal tax withholding. Ordinary income taxes may apply. State and local taxes and withholding may also apply.3 With Professional Management with Income+, payouts begin in retirement at your request. Professional Management with Income+ seeks to manage your investments to

create payouts that can last into your early 90s. If you think you’ll want payouts longer than that and want a lifetime guarantee, consider an optional annuity purchase. Voya Retirement Advisors, LLC does not guarantee payout amounts or payouts for life.

We’re here to help you.SFDCP CounselorsYour department dedicated SFDCP counselor is available to assist you with a variety of services designed to help you review your specific situation and develop a plan that helps you work toward your retirement objectives.

Your SFDCP counselor is local and available to provide ongoing support to help meet your needs, including:

• Face-to-face individual consultations

• Group enrollment and financial education seminars

• Creating action steps based on your personal goals

• Helping you develop a budget for today’s expenses and for living in retirement

Speak to an Investment Advisor RepresentativeRepresentatives are experienced financial professionals available to provide education on your retirement savings, including the features of your Deferred Compensation Plan.

Information from registered Plan Service Representatives is for educational purposes only and is not legal, tax or investment advice. Local Plan Service Representatives are registered representatives of Voya Financial Advisors, Inc., member SIPC.

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Keep Your Money in the SFDCPPostpone Your Distribution until LaterIf you leave your money in the SFDCP, your savings retains its potential to grow tax-deferred—meaning you won’t have to pay any income tax on it until you withdraw it. Some of the other benefits are:

• Your money keeps working for you until you need it.

• You can get account statements and log in to your account the same way you always have.

• You can still invest in the Plan’s investment options.

• No action is needed on your part—you just leave your money in the Plan.

However, you must begin receiving a Required Minimum Distribution (RMD) by April 1 of the year following the year in which you reach age 72 or sever employment, which-ever occurs later.

When you are ready to receive a distribution, you will be able to select from the payout options available through the SFDCP at that time.

Termination InstallmentsInstallments of a Certain Timeframe or a Certain AmountYou may choose a specific timeframe OR a specific dollar amount. Installments are paid out monthly, quarterly, semi-annually or annually, per your election. This allows you to continue participating in the SFDCP while realizing ongoing income in retirement.

Installments are paid out on the 15th of the month of your requested installment frequency (or the prior business day if the 15th is a weekend or stock market holiday). If you request payment directly to your bank, please allow at least 3 business days for the payment to be reflected in your account.

Income+ PaymentsIf you are retired and enrolled in the Professional Management program, you can opt for monthly Income+ payments that are designed to last throughout your retirement. You’ll have the flexibility to start or stop Income+ payments at any time

once you have retired and retain the ability to request partial withdrawals as well. For more information on this option call 888-SFDCP-4U (733-2748) and ask to speak with a Voya Retirement Advisors Investment Advisor Representative.

Partial Withdrawal and Total Distribution OptionsPartial WithdrawalYou may elect to take a portion of your balance as a partial withdrawal. Amounts received by you can be indirectly rolled over to another employer plan or an IRA within 60 days of receipt. Any amounts not rolled over are subject to income tax. In order to roll over the full amount of the distribution, you will need to make up the withholding amount from other funds.

Total DistributionIf you select a total distribution, the full value of your account will be distributed. Unless you elect a direct rollover of all or a portion of the distribution, the distribution will be paid to you. Any funds not rolled over will be fully-taxable to you the year in which the funds are distributed. Federal income tax is withheld at a rate of 20% of the gross amount and state withholdings will be applied as required by the state.

Investing in an AnnuityIf you are concerned about running out of money in retirement, you may want to consider using at least part of your retirement plan assets to invest in an Individual Retirement Annuity.

An annuity is one way to convert your retirement assets into a guaranteed, regular stream of income payments. Remember, an annuity is suitable for long-term investing, and investing in an annuity within a tax-deferred account will provide no additional tax savings.

Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income. The amount excluded from your income can’t be used to claim a medical expense deduction.

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Rollovers4

Rollovers to Other Employer-Sponsored PlansWhen you become eligible to take a rollover (usually upon severance of employment), you may elect to roll over all or a portion of your balance to another qualified and eligible 401(a), 401(k), 403(b) or governmental 457(b) plan—if your new employer’s plan accepts such rollovers.

Rollovers to IRAsWhen considering rollovers, you may also elect to roll over all or a portion of your balance to an IRA with a financial institution of your choice. When you roll over your funds to an IRA or a 401(a), 401(k) or 403(b) plan, and if you are under age 59½ and subsequently request a distribution from that plan, you may be subject to an additional 10% tax penalty, in addition to ordinary federal and state income taxes.

Qualified Charitable Distributions from IRAsA qualified charitable distribution (QCD) generally is a nontaxable distribution made directly from an IRA (other than a SEP or SIMPLE IRA) to an organization that is eligible to receive tax-deductible contributions. You must be at least age 72 when the distribution is made. The maximum annual QCD amount you can contribute for tax exclusion is $100,000. Any QCD in excess of the exclusion limit is included in your income as with any other distribution. Visit IRS.gov for more information on Qualified Charitable Distributions.

For more details about these options, call 888-SFDCP-4U (733-2748).

4 A rollover is not taxable to you until you take payment from that institution.

Required Minimum Distribution RulesThe IRS requires that distributions under a governmental 457(b) plan begin no later than April 1 of the calendar year following the calendar year in which you attain age 72 or sever your employment, whichever occurs later. If you fail to receive the Required Minimum Distribution (RMD) for any tax year, a 50% excise tax is imposed on the required amount that was not distributed in a timely manner.

Before year-end, Voya will review the status of each affected participant’s account to determine if the RMD amount has been satisfied. Voya will process the withdrawal (full or remaining) by year-end and mail the participant a check for the amount of the distribution. This ensures that all participants will meet their distribution obligation. Participants that may be subject to RMD (age 72 in the current year) will be notified in second quarter confirmation statements, including instructions on how to take their distribution via a Customer Service Representative. A reminder will be sent out in the fall regarding the RMD requirements. You should consult with your attorney or tax advisor with any questions you may have.

You should carefully evaluate the features of the receiving plan, as there may be higher fees and/or lower quality investment choices in the new plan. Please call 888-SFDCP-4U (733-2748) if you wish to discuss your rollover options.

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Tax Withholding RulesWithdrawals and distributions are considered ordinary taxable income by the Internal Revenue Code. If the distribution you elect is an eligible rollover distribution, and you do not elect to roll it directly over to another eligible retirement plan, regulations require that federal income tax be withheld at a rate of 20% of the gross taxable amount you request and state withholdings will be applied as required by the state. Distributions that are not eligible for rollover treatment include RMDs and certain death payments. Your state of permanent residence may or may not require mandatory withholding. State withholdings will be applied as required by the state. You may elect to have more state or federal income tax withheld. Depending upon your personal circumstances, you may or may not owe additional income tax on your distribution(s) when you file your tax returns.

Special note for participants who elect period payments lasting 10 years or more:Tax withholding from periodic payments are treated the same way as withholding from wages. If your payout occurs regularly for more than 1 year, it is considered a periodic payment. Periodic payments made from qualified retirement plans that are not based on life expectancy or are expected to last less than 10 years remain eligible for rollovers and are therefore subject to the mandatory 20% federal tax withholding described in the Tax Withholding Rules section above.

You may opt out of withholding for periodic payments that are expected to last for 10 years or more. If you do not opt out, the taxes withheld from your periodic payment will be based on the marital status and withholding allowances you specify. You may also elect to withhold additional amounts from your payment. If you do not make an election, taxes will be withheld at a rate equal to an election of “Married with 3 withholding allowances.”

Tax FormsYou will be mailed a Form 1099-R by January 31 of the year following any year in which you receive a distribution. If you do not receive a Form 1099-R by February 15 after a year in which you received a distribution, please call 888-SFDCP-4U (733-2748) to request a duplicate.

Death ClaimsBeneficiaryYour beneficiary is the person(s) you specify to receive your account balance upon your death (to the payment option you choose, if applicable). Your primary beneficiary is the person who will receive the account balance or the remainder of the balance in the percentage that you specify. If your primary beneficiary predeceases you, your contingent beneficiary (or beneficiaries) will receive the account balance or the remainder of the balance in the percentage(s) that you specify.

Beneficiary claims will be processed according to the directions you provide and Voya will establish a beneficiary account and perform the account split accordingly. Beneficiaries have the same flexibility with distributions as you do. Spousal beneficiaries can maintain the account balance in the plan until 72, when distributions are required to begin. Non-spousal beneficiaries can maintain a balance in the account for up to ten years. If the deceased has an outstanding loan, the beneficiary may choose to pay off the loan, otherwise it will default to the estate.

ReminderPlease remember to review your beneficiary designation often. To review or change your beneficiary, log in to your account and go to Personal Info > Beneficiary Information, or you can call 888-SFDCP-4U (733-2748) to speak with a Customer Service Representative to request a Beneficiary Designation Form.

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Eligible Rollover Distribution/Direct Rollover

The following types of distributions are eligible for rollover:

• Partial withdrawal

• Total distribution

• A series of withdrawals lasting less than 10 years

The following types of withdrawals are not eligible for rollover:

• RMD withdrawals made after age 72

• A series of withdrawals lasting 10 years or more

• Withdrawals correcting excess contributions (refunds)

A direct rollover allows you to directly roll over your SFDCP account balance to another qualified employer’s plan or IRA that accepts such rollovers. Eligible rollover distributions that are directly rolled over are not subject to federal income tax withholding or taxation.

A series of withdrawals lasting less than 10 yearsTax withholding from periodic payments are treated the same way as withholding from wages. If your payout occurs regularly for more than 1 year, it is considered a periodic payment. Periodic payments made from qualified retirement plans that are not based on life expectancy or are expected to last less than 10 years remain eligible for rollovers and are therefore subject to a mandatory 20% federal tax withholding.

Partial WithdrawalThe withdrawal of a portion of your balance.

RolloverA tax-deferred rollover occurs when you withdraw cash or other assets from an eligible retirement plan and contribute all or part of it within 60 days to another eligible retirement plan.

Required Minimum Distribution (RMD)A governmental requirement that requires distribution of assets the year following the calendar year in which you attain age 72 or sever your employment.

Severance of EmploymentThis is the date you retire or otherwise sever employment with the City and County of San Francisco, as determined by your payroll officer.

Termination InstallmentsThe termination installment option allows you to withdraw money in installments, either by specific timeframe or specific dollar amount. You can keep your funds invested in the investment options available through the SFDCP and transfer funds among those options.

Total DistributionThe total distribution option distributes your entire account balance at one time.

Call 888-SFDCP-4U (733-2748) to speak with a representative

for more information on your withdrawal or

distribution options

Glossary of Terms

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Plan administrative services are provided by Voya Institutional Plan Services, LLC (VIPS). VIPS is a member of the Voya® family of companies and is not

affiliated with the City and County of San Francisco.

©2020 Voya Services Company. All rights reserved.

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