To take money out of your Massachusetts state 457(b) deferred compensation account, you submit the Massachusetts SMART Plan withdrawal form to Empower Retirement, the plan’s recordkeeper. You can pull the form from the participant portal at mass-smart.empower-retirement.com, request it by calling the SMART Plan line at (877) 457-1900, or pick it up from your employer’s human resources office. The form asks for your identifying information, the reason you qualify for a distribution, how you want the money delivered, and your tax withholding choices.
Confirm You Qualify Before You Fill Anything In
Federal law limits when a governmental 457(b) will release funds, and the form makes you pick the specific triggering event. Choose one that doesn’t match your employment status and Empower will reject the request. Under 26 U.S.C. § 457(d)(1)(A), the SMART Plan permits distributions in four situations:1Office of the Law Revision Counsel. 26 USC 457 – Deferred Compensation Plans of State and Local Governments and Tax-Exempt Organizations
- Separation from service with your Massachusetts public employer, whether through retirement, resignation, layoff, or termination.
- Reaching age 59½, which allows an in-service distribution even if you’re still working.2Internal Revenue Service. Comparison of Tax-Exempt 457(b) Plans and Governmental 457(b) Plans
- An unforeseeable emergency you can’t cover with insurance, other assets, or by stopping your plan contributions.
- A small account balance of $5,000 or less after you’ve separated from service.
If you’re still on the state payroll and under 59½, an unforeseeable emergency is your only path in, and the plan applies that standard strictly. Everyone else generally files under separation from service.
Filling Out the Form
Personal Information
Enter your full legal name, Social Security number, date of birth, current mailing address, and daytime phone. The name and SSN must match what Empower has on file. If you’ve changed your name since enrolling, update your account first, because a mismatch here bounces the whole form back.
Distribution Type and Amount
Select the reason for the distribution from the options listed. Marking “separation from service” while you’re still employed by the state is the most common reason forms get returned. Then choose whether you want your full balance or a specific dollar amount.
Payment Method
You have three ways to receive the money:
- Direct deposit (ACH) to your bank. You’ll enter your routing and account numbers. One-time ACH distributions carry a $15 processing fee.3Massachusetts Deferred Compensation SMART Plan. Massachusetts Deferred Compensation SMART Plan – Mandatory OBRA Distribution/Direct Rollover/Transfer Request
- Paper check mailed to the address on file. No fee, but you’re at the mercy of the postal service.
- Direct rollover to another eligible retirement account. You’ll need the receiving plan’s name, account number, and mailing address.
Spousal Acknowledgment
Depending on your employer’s adoption agreement, some distribution types may require your spouse to sign off. Your HR office can tell you whether that applies to your account before you submit.
Extra Documentation for Emergency Withdrawals
Unforeseeable emergency requests get the tightest review. The IRS treats a qualifying emergency as a severe financial hardship beyond your control, and the recognized categories include:4Internal Revenue Service. Unforeseeable Emergency Distributions From 457(b) Plans
- Illness or accident affecting you, your spouse, your beneficiary, or a dependent
- Uninsured casualty damage to your property, such as from a natural disaster
- Funeral expenses for your spouse or dependent
- Imminent foreclosure or eviction from your primary residence
- Unreimbursed medical expenses or prescription costs
Attach proof: unpaid medical bills, an eviction notice, repair estimates for uninsured damage, or comparable evidence. The plan will only release enough to cover the emergency plus any tax you’ll owe on the distribution. You can’t drain the account to cover a $3,000 bill. Before approving anything, Empower confirms you’ve exhausted other options, including stopping your salary deferrals into the plan.
Setting Your Tax Withholding
The form has a withholding section for federal and Massachusetts taxes. Getting this right keeps you from either being surprised at tax time or handing over too much upfront.
Federal Withholding
If your distribution is eligible for rollover and you take it as cash instead, Empower must withhold 20% for federal taxes, and you cannot opt out.5Internal Revenue Service. Pensions and Annuity Withholding For distributions that aren’t rollover-eligible, such as unforeseeable emergency payments, the default rate is 10% and you can elect to waive withholding entirely.6Internal Revenue Service. Internal Revenue Service Notice 2003-20 You can also request more than the default if you expect a bigger tax bill.
Massachusetts State Withholding
Massachusetts taxes retirement distributions as ordinary income at a flat 5%.7Mass.gov. Personal Income Tax for Residents The form lets you choose a state withholding percentage. Skip it and you’ll owe the full amount when you file.
No 10% Early Withdrawal Penalty
Governmental 457(b) distributions are not subject to the 10% early withdrawal penalty, whatever your age. Separate at 45 and cash out the whole balance, and you owe ordinary income tax but no penalty.8Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions From Retirement Plans The one exception: any money rolled into your SMART Plan account from a 401(k), 403(b), or traditional IRA keeps its original character, so pulling that portion before 59½ does trigger the 10% penalty on that piece.
Choosing a Direct Rollover Instead of Cash
If you don’t need the money now, a trustee-to-trustee rollover moves your balance directly to another retirement account, avoids the mandatory 20% withholding, and keeps the funds tax-deferred. Eligible destinations include a traditional IRA, Roth IRA, another governmental 457(b), a 401(k) or 401(a), a 403(b), a SEP-IRA, or a SIMPLE IRA that has been open for at least two years.
On the form, mark “direct rollover” as the payment method and provide the receiving plan’s details. A rollover to a Roth IRA turns the entire pre-tax balance into taxable income for that year, which can push you into a higher bracket, so plan for the tax.9Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
Where to Send the Form
The SMART Plan administrative office is in Waltham, not at Empower’s Colorado headquarters:10Empower Retirement. Massachusetts Deferred Compensation SMART Plan Quick Enrollment Form
Mail: Empower Retirement, 255 Bear Hill Road, Waltham, MA 02451
Fax: 1-781-890-2919
You can also upload a scanned form through the secure participant site at mass-smart.empower-retirement.com. Faxing or uploading skips the postal transit time. Keep a copy of whatever you send.
Some distributions and higher-value requests require a notarized signature or Plan Sponsor authorization from your employer. Call the SMART Plan line at (877) 457-1900 or check with HR before you mail anything. A form returned for a missing notary stamp or employer signature adds days to the process.
What Happens After You Submit
Empower reviews your form and any supporting documentation before releasing funds. You’ll get a transaction confirmation through the online portal or by email once it’s approved. If something is incomplete or doesn’t match your account, Empower contacts you for corrections rather than processing part of the request.
Direct deposits usually reach your bank within a few business days after processing. Paper checks take longer because of mail delivery. Direct rollovers go straight to the receiving plan’s custodian.
The 60-Day Indirect Rollover Trap
If you take your distribution as a check and later decide to roll it over yourself, you have exactly 60 days from the day you receive the funds to deposit them into another retirement account. Miss the deadline and the entire distribution becomes taxable income for the year. The IRS can waive the deadline in limited circumstances beyond your control, but don’t plan around getting an extension.9Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
Remember that 20% was already withheld from that check. To roll over the full original amount, you have to add the withheld 20% from your own pocket when you make the deposit. You’ll get it back as a refund at tax time, but you’re fronting the money in the meantime. If you know you want to roll over, choose the direct rollover option on the form instead and skip the problem entirely.