HII Ingalls Shipbuilding Inc. Hourly Employees ... - Benefits Connect

HII Ingalls Shipbuilding Inc. Hourly Employees’ Retirement Plan
Summary Plan Description
March 2011
Tax Considerations
Maximum Benefits for Tax Purposes
Plan benefits are limited to an annual maximum by federal law. In addition, federal tax law
limits the amount of compensation that may be used to calculate your benefits. Those limits
may be raised in accordance with Internal Revenue Service (IRS) regulations.
When You Pay Taxes
Generally, when you receive your monthly retirement benefit payments, you are subject to
federal income tax and, in some states, state and local income tax.*
If you receive a lump sum payment of your benefit before you have reached age 55, the
payment may be subject to a 10% penalty tax in addition to the federal ― and, if applicable,
state and local ― tax. You can delay paying taxes on your lump sum distribution — and
avoid the additional 10% tax — by rolling over your lump sum payment to an individual
retirement account (IRA) or another employer’s retirement plan within 60 days of your lump
sum payment date.
The additional 10% tax does not apply in the following situations:
• If your beneficiary receives a lump sum distribution as a result of your death
• If you receive a disability benefit in the form of a lump sum.
* Does not apply to after-tax contributions to the Plan. Taxes were withheld prior to contributions being
made.
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