Accessing your money before retirement
The State University of New York ORP is designed to allow retirement at any age.
- Distributions from ORP contracts are permitted any time after separation from services, subject to an IRS 10% penalty for distributions prior to age 59½, unless separating from service after reaching the normal retirement age of 55.
- Inservice distributions are not allowed.
- Other allowed distributions include: certain hardship withdrawals, loans, QDRO account distributions, and distributions made upon your separation from service, death or disability.
Federal tax law requires that retirement income begin by April 1 of the calendar year following the later of: (1) the calendar year in which you reach age 72 (age 70½ if born before July 1, 1949), or (2) the calendar year in which you terminate employment.
Loan provisions in the plan make it possible to access your account, subject to certain limitations, without permanently reducing your account balance. Defaulted loan amounts (not repaid on time) will be taxed as ordinary income and may be subject to a 10% federal tax penalty if you are under age 59½.
Employees may borrow up to 50% of the accumulated value of their contracts, subject to IRS regulations. Current IRS regulations set a maximum aggregate loan balance of $50,000.