Takeaway: If you are experiencing financial need that’s COVID-related, you can now withdraw from your retirement account without the usual penalties, thanks to our union’s hard work! But under the current CARES Act rules, you need to do so by the end of December. Please respond to this email if you’d like to join us for a brief Zoom info session next week with union leadership and staff.
I’m an Assistant Professor in the Journalism and Media Studies Department of the School of Communication and Information. I’m also the parent of two toddlers, and just like many of you, my family was impacted by COVID in needing to cover extraordinary unexpected expenses—child care in my case.
The CARES Act was passed back in the spring and contained a provision that would allow us to withdraw from our state retirement accounts—most of us are in TIAA-CREF—without the normal 10% penalty. But when I reached out to TIAA-CREF, they said that our employer needed to authorize them to implement that CARES Act provision for our plan. We were subsequently told by Rutgers Human Resources that since we’re in a state plan, only the state could authorize this provision for our members.
I turned to our union to better understand the issue and see what could be done. Our president and my SCI colleague, Todd Wolfson, immediately put staff on it and quickly found out that we needed to move the wheels of state government in order to take advantage of the provision in time before it expires at the end of the year.
With the urging of our union, the necessary legislation—already unanimously approved in the state legislature—was speedily signed by Governor Murphy. A section tacked onto another COVID-related bill now allows for an “in-service distribution” under these circumstances.
TIAA-CREF and the other state retirement vendors have already been notified, and Rutgers was notified earlier this week. So if you have the need, I strongly recommend you contact your retirement account vendor directly—no need to go through Rutgers. You should explore this quickly, as this CARES Act provision is set to expire at the end of the year, and there may be some administrative work to do on the back end by the vendor after you’ve made a decision.
Here’s more information directly from TIAA-CREF:
The CARES Act allows participants to take a retirement plan/account withdrawal through December 30, 2020, without the 20% mandatory federal tax withholding or 10% early withdrawal penalty.
— December 24 is the last day to request a withdrawal.
— Forms must be received in good order by 1 p.m. (ET).
— If using the automated platform, requests must be submitted in good order by 1 p.m. (ET).
I want to thank our union, Todd and our other elected representatives, and our union staff. Without their responsiveness and persistence, this would not have been an option for any of us. I can’t tell you how frustrating it was to hear from Rutgers HR that this was a state issue so nothing could be done by the university. This is one real and specific reason we have and need a union. And this isn’t the first time I’ve been grateful to know I have people fighting for us and protecting our rights through this crisis. In looking at what’s been happening at universities throughout the country, I feel like the union has provided a safe house through this storm.
I know that I will continue to pay attention and get more involved with our union. I encourage all of you to do the same.
We’ll hold a Zoom info session on this issue next week if anyone is interested, so RSVP by replying to this email if you’d like those details. But please don’t wait to initiate the process with your retirement account vendor if you have the need and plan to withdraw funds.
Assistant Professor of Journalism and Media Studies, Rutgers AAUP-AFT member
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