Wealth
AEP Pension Plan
The following summarizes the AEP Pension Plan benefits available to all AEP vested employees. For Plan-specific details such as formulas or early retirement factors, please refer to the AEP Retirement Plan (Pension) Summary Plan Description.
AEP Pension Support Team 1-888-237-2363 (Option 1 or 2) Monday - Friday 8:00 a.m. - 8:00 p.m. EST
Who is Eligible?
If you are a member of the AEP Retirement Plan (Pension) with three or more years of credited vesting service, you are vested in your Pension benefit.
AEP Retirement Plan (Pension) Grandfathered Participants
If you were continuously employed with an AEP Company since January 1, 2001, and you were either a participant in the AEP Retirement Plan (Pension) or in the waiting period, you are eligible for grandfathering provisions.
Disabled AEP Retirement Plan (Pension) Participants
If you became disabled while an active employee with an AEP company, you received annual interest credits and company credits through August 31, 2013. After September 1, 2013, disabled Pension Plan participants no longer received company credits under the Plan; however, they continued to receive interest credits.
If you choose to begin your pension benefit payment or receive retiree coverage under any of the AEP Health & Welfare Plans, you terminate your right to receive any additional payments under the AEP Long-Term Disability (LTD) Plan.
Central And Southwest Corporation Cash Balance Retirement Plan Participants
The Central and Southwest Corporation Cash Balance Retirement Plan (CSW Pension) was incorporated into the American Electric Power System Retirement Plan effective December 31, 2008, when the CSW Pension Plan was merged into the AEP Retirement Plan (Pension). This summary will refer to the CSW Pension Plan as if it continued to be a separate Plan.
The CSW Pension Plan generally provides the same cash balance benefit formula that is provided under the AEP Retirement Plan, but it also includes special provisions for calculating the benefits payable to employees who have been continuously employed with the Company since July 1, 1997, either because they were then at least age 50 with at least 10 years of service (a Grandfathered CSW Plan Participant) or not (Protected Prior CSW Pension Plan Participants). Please refer to the CSW Pension Plan - Summary Plan Description for Active Employees for additional details.
When Will My Pension Payments Begin?
The earliest your pension benefits can begin is the first of the month following the date you end employment. No benefits can be paid out prior to that date, regardless of when your paperwork is received and deemed in good order.
Your first payment will begin as soon as possible, based on the commencement date reflected in your paperwork, after all paperwork and all required documentation has been received.
If you choose a monthly annuity, you will receive subsequent payments on the first of the month. Annuity checks will be dated the first of the month. Direct deposits will be effective the first of the month.
Watch Your Mailbox For Your Pension Plan Distribution Package
If you are over age 65 and vested in the AEP Pension Plan and you have not already requested a distribution kit, you will receive one automatically 45 days after your last day of employment. Your kit will include your pension calculation and the paperwork you’ll need to make a pension benefit payment election. If you would like to defer payment until a later date, you can disregard and request a kit at a later date when you are ready to commence your benefit.
AEP Retirement Savings 401(k) Plan
Your 401(k) Plan can be a valuable part of your retirement portfolio. Be sure to review your options below to ensure you get the most out of the assets you’ve worked so hard to build.
1-877-237-4015
401(k) Plan Account Balance Options
Your options will depend on your account balance, as outlined below. Note: After your employment ends, there is a 30-day hold period before you can take a distribution.
If Your Account Balance Is $1,000 Or Less
Your money may not remain in the 401(k) Plan. You may:
- Directly roll over your money to an individual retirement account (IRA) or another qualified Plan to preserve its tax-deferred status. You must initiate a rollover within 90 days following the end of the month in which your employment ended by visiting aep401k.com or by calling 1-877-237-4015.
- “Cash out” your account by taking no action within 90 days. If you do not initiate a direct rollover within 90 days, approximately four months after your employment ends, you will receive a check for the amount of your account balance minus 20% mandatory federal income tax withheld. You may also be subject to a 10% early withdrawal penalty if you’re under age 59½. The check will be mailed to your address on record. By January 31 of the year following your distribution, you will receive a Form 1099-R stating the total distribution amount and its taxable and nontaxable portions. You must report the distribution on your income tax return.
If Your Account Balance Is Between $1,000 And $7,000
Your money may not remain in the 401(k) Plan. You may:
- Directly roll over your money to an IRA or another qualified Plan to preserve its tax-deferred status. You must elect rollovers within 90 days following the end of the month in which your employment ended by visiting aep401k.com or calling 1-877-237-4015.
- Allow your money to be automatically rolled into an IRA by taking no action within 90 days. If you do not elect a direct rollover within 90 days, your total account balance will be automatically rolled over to an IRA with the IRA provider selected by AEP. You will receive additional information if this process applies to your account.
- Apply for a distribution in the form of a lump-sum or partial payment (federal income tax will apply, and you may also be subject to a 10% early withdrawal penalty if you’re under age 59½*). Visit aep401k.com or call 1-877-237-4015 to do so.
If Your Account Balance Is More Than $7,000
You may:
- Directly roll over your money to an IRA or another qualified Plan to preserve its tax-deferred status. To do so, visit aep401k.com or call 1-877-237-4015.
- Leave your money in the 401(k) Plan (note that you may no longer contribute to your account). If you choose to defer payment of your account balance, you can do so until April 1 of the year following the year in which you turn age 73, at which time required minimum distributions (RMDs) must begin as mandated by the IRS.
- Apply for a distribution in the form of a lump-sum or partial payment (federal income tax will apply, and you may also be subject to a 10% early withdrawal penalty if you’re under age 59½*). Visit aep401k.com or call 1-877-237-4015 to do so.
* The 10% early withdrawal penalty does not apply to payments made after you separate from service, if you will be at least age 55 in the year of your separation of employment.
Important Tax Information
You may wish to consult with a tax or financial advisor before deciding how to handle your account balance in the 401(k) Plan since your actions can have significant financial implications. Read the Retirement Savings Plan’s “Special Tax Notice with Roth Addendum” for detailed information about the tax rules associated with qualified Plan distributions.
A Note About Roth 401(k) Balances
All Roth 401(k) account balances will be considered separately when determining if that portion of your account meets the $1,000 or the $5,000 distribution threshold. This means that the Roth 401(k) portion of your balance may be subject to either the mandatory cash-out or the automatic rollover distribution rules while the non-Roth 401(k) portion of your account may not, or vice versa.
AEP Stock Distributions
You may elect to have your applicable 401(k) Plan balance in the AEP Stock Fund paid to you in-kind. To request an in-kind distribution of AEP stock, call 1-877-237-4015. If you request to roll over your distribution, you must provide the name of the institution, your account number, and Depository Trust Company (DTC) number for the receiving financial institution at the time of your distribution request. The DTC is the clearinghouse for electronic security transfers.
There are special rules regarding payments from the 401(k) Plan that include AEP stock that may affect your taxes and rollover decisions. Read the section of the “Special Tax Notice with Roth Addendum” about employer stock referenced on the previous page for a more detailed explanation of these rules and how they can affect your distribution choices.
Outstanding 401(k) Plan Loans
If you have an outstanding loan, read this section carefully.
How to pay off your loan balance(s):
1. Recalculate your loan to a monthly payment
You can continue to make your scheduled payments via electronic deduction from your bank account, or you may send paper checks. Call 1-877-237-4015 and talk to an Empower representative to review your options.
2. You may pay off your loan(s) in full
To obtain your loan payoff amount(s), visit aep401k.com or call 1-877-237-4015. If you choose to pay off your outstanding loan balance(s):
- Your payment must be made with a cashier’s check, certified check, or money order—personal checks will not be accepted. Please make the check payable to “Trustee of the AEP System Retirement Savings Plan.”
- Place the words “FBO” [insert your name and Social Security number] on the “Memo” line of the check. “FBO” means “for benefit of.”
- Mail your payment to: Empower Retirement, PO Box 419784, Kansas City, MO 64141-6784
Important Considerations About Your Outstanding Loan Balance(s)
- Full payment must be received before you request a distribution from your account. If you do not pay off your loan before you request a distribution, your loan will be considered in default, and you will owe federal income tax on the outstanding balance along with a 10% early withdrawal penalty if you are under age 59 1/2.*
- Once you request a lump-sum distribution from your 401(k) Plan account, you no longer qualify for loan repayment. Your outstanding loan balance(s) will be offset against your account balance prior to the lump-sum distribution.
- If you choose to defer payment of your 401(k) Plan account balance and do not sign up for electronic deduction from your bank account for your loan payments, your loan will be considered due in 90 days. Likewise, if you choose to defer payment of your retirement savings account balance and do not submit payment(s), your loan will be considered due in 90 days.
- If you do not make any loan payments after your employment ends, you will receive default notices for your outstanding loan balance(s) until you bring the loan(s) payments current or an actual loan default occurs.
* The 10% early withdrawal penalty does not apply to payments made after you separate from service if you will be at least age 55 in the year of your separation of employment.
Financial Services
Financial Wellness Counseling and Retirement Planning
1-866-217-8693 Monday - Thursday 9:00 am - 8:00 pm EST Friday 9:00 am - 5:00 pm EST
Goldman Sachs Ayco Financial Wellness
Goldman Sachs Ayco Financial Wellness counseling and retirement planning is available to AEP employees through the end of the month in which their employment ends.
SIRVA Mortgage Services
After your retirement, you can no longer request financing through SIRVA Mortgage Lending Services; however, your retirement does not affect any existing SIRVA mortgages you got prior to your retirement.
This guide covers the benefits of retirees who are age 55 or older and who have ten or more years of credited service with AEP as of their last day of employment. If you are under age 55 with ten years of credited service as of your last day of employment, please refer to the guide “Leaving AEP: A Guide for Ending Employment.” If you were a part-time employee, please note that the following Plans or programs referenced in this guide are not applicable: Life Insurance, Dependent Life Insurance, Accidental Death & Dismemberment (AD&D) Insurance, the Long-term Disability (LTD) Plan, personal days off, educational assistance, adoption assistance, the educational awards program, and SIRVA Mortgage Services.
This guide is not intended to be a Plan document, Summary Plan Description, or required notice with respect to any of the Plans mentioned. AEP reserves the right to modify, amend, suspend, or terminate the Plans at any time. Refer to the applicable Plan document if you have any questions relating to a specific Plan or benefit.