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Step 3—Apply for Your Retirement Benefits: Thrift Plan

Although you can expect that Social Security and the Company pension benefits will defray some of your retirement costs, reponsibility for building a secure retirement falls squarely on your shoulders. While your Social Security benefits and pension benefits are two legs of your three-legged retirement stool, your personal savings is the leg provided by you. One way the Company helps you to save for retirement is through the Thrift Plan. If you used this vehicle during your years at PSEG, there are some steps you need to take to claim your benefit.

Selecting a Payment Option
Receiving Your Benefit

Selecting a Payment Option

If you've saved more than $1,000 through the Thrift Plan, you have several payment options to choose from (balances under $1,000 are automatically distributed in a lump sum):

Partial Withdrawal

• You can take a partial withdrawal from your account value for any amount
• At age 70-1/2, you are required to begin receiving minimum distributions from your account. You will receive a minimum distribution from your account each year that you continue to have a balance. Your minimum distribution requirement will end when you deplete your account or take a lump-sum payment

Annual Installment Payments

• You receive payments once a year
• Your first annual payment is sent at the end of the month in which you request it
• Payments are made at the same time each year, for up to 10 years, according to your election
• Payments spread out over less than 10 years will automatically have 20% withheld for Federal income tax, unless rolled over into an IRA or other qualified plan
• The balance of your account is subject to investment gains or losses
• You can elect the total balance in a lump sum at any time during the payment period

Quarterly Installment Payments

• You receive payments once each quarter
• Your first payment is sent at the end of the month in which you request it
• Payments are made every three months for up to 10 years according to your election
• Payments spread out over less than 10 years will have 20% withheld automatically for Federal income tax, unless rolled over into an IRA or other qualified plan
• The balance of your account is subject to investment gains or losses
• You can elect the total balance in a lump sum at any time during a payment period

Lump-Sum Payment

• You receive the full value of your account
• You can request an immediate lump sum (if you previously requested an installment payment) at any time
• If no election is made, minimum distribution will begin

Receiving Your Benefit

Taxes on Your Thrift Plan Benefit

You can call Benefits Express to request that either a percentage or a dollar amount of your Thrift Plan account be withheld to cover the taxes on your benefit. Or the taxable portion of any payment from the Thrift Plan can be rolled over directly by the Trustee to an IRA or another qualified employer's plan at the time of the payment.

If you don't make a direct rollover, 20% of the taxable portion of your payment will be withheld for Federal income taxes. The 20% will not be automatically withheld on 10-year installment payments. Taxation on installments can be requested by calling Benefits Express. You can request either a percentage or a dollar amount to be withheld.

To make a withholding or rollover request, call 1-800-571-0400 and follow the voice recognition prompts to speak with a Benefits Express representative.