Alerus 401(k) Distribution Form: Online vs. Paper, Rollovers, and Withholding

You submit an Alerus 401(k) distribution form either online through the Alerus participant portal at retirementlogin.alerus.com or on paper uploaded through My Alerus. The online Distribution Center is the faster route and lets you model your payout and tax withholding before you commit. Once Alerus has your request in good order, processing takes three to five business days.

Submitting the Request Online

Log in at retirementlogin.alerus.com, open your plan under Retirement, and click the Distribution Center link on the right side of the page.¹ The portal only shows distribution types your plan actually allows, with the minimum and maximum amount listed for each. You can process one type per transaction.

From there, the flow is straightforward:

Pick a distribution type from the options your plan permits.
Choose either the maximum available balance or a specific dollar amount.
If you want to roll any portion into an IRA or another employer plan, enter the rollover percentage. Not every distribution type allows rollovers.
Click Calculate to see the estimated payment and taxable amount before you commit.
Check the box acknowledging the tax withholding that applies.
Choose a mailed check or direct deposit, if your distribution type allows direct deposit.
Review the Distribution Certification, pass multi-factor authentication, and select Finish. A downloadable confirmation appears immediately.

When You Need the Paper Form Instead

Some requests cannot be completed entirely online. If your employer’s signature is required, or if a Medallion Signature Guarantee is needed, you’ll complete a paper distribution form and upload it. To upload, log in to My Alerus, go to Plan Summary under Retirement, click Contact Us, and use the upload page.² If you’re not sure whether your request needs a paper form, contact the Alerus Client Service Center before you start.

What to Have Ready Before You Start

Have your full legal name as it appears on the account, your Social Security number, and your Plan ID. The Plan ID is the alphanumeric code assigned to your employer’s plan; it appears on a quarterly statement or inside the participant dashboard under your plan details.

For direct deposit, you’ll also need the nine-digit routing number and your account number, both of which appear on a personal check or in your banking app. Check them twice. A transposed digit can bounce the transfer back to Alerus or send funds to the wrong account, adding days to the process.

Spousal Consent

If you’re married and your plan is subject to the qualified joint and survivor annuity rules, your spouse must consent in writing before Alerus will process the distribution. Federal law requires that signature to acknowledge the effect of your election and to be witnessed by either a plan representative or a notary public.³ Without the witnessed consent, the election is not effective and Alerus will reject the request.

Not every 401(k) plan carries these rules. Many profit-sharing and 401(k) plans that pay benefits only as lump sums are exempt. Your summary plan description or the Alerus distribution materials will tell you whether spousal consent applies to yours. If it does and your spouse cannot be located, you can establish that fact to the satisfaction of a plan representative as an alternative to obtaining the signature.³ Notary fees for the witnessed signature generally run between $2 and $25, depending on your state.

Choosing a Distribution Type

Direct Rollover

A direct rollover moves the money straight from Alerus to another eligible retirement plan or an IRA without the funds passing through your hands. It’s the cleanest option when you’re changing jobs or consolidating accounts, and the mandatory 20% federal withholding does not apply.⁴ You’ll need the name of the receiving institution, the account number, and in some cases the mailing address so Alerus can title the check or wire correctly. A check made payable to “Fidelity FBO [Your Name]” (or the equivalent at your new custodian) preserves the tax-deferred status.

Lump Sum or Partial Distribution

If you want cash in hand, you can take the full balance or a specific dollar amount, delivered by mailed check or direct deposit. On a partial distribution, the remainder stays in the plan unless you separately arrange to move it. Anything paid directly to you rather than rolled over triggers the mandatory 20% federal income tax withholding, which Alerus must deduct before sending the money.⁵

60-Day Indirect Rollover

Even on a cash distribution, you can avoid tax by depositing the full gross amount into another eligible retirement plan or IRA within 60 days.⁶ Alerus has already withheld 20%, so you have to make up that difference out of pocket. On a $50,000 distribution, Alerus sends you $40,000 after withholding $10,000. To complete the rollover and avoid taxes on the full amount, you deposit $50,000 into the new account: the $40,000 you received plus $10,000 of your own money. You recover the withheld amount when you file your tax return. Miss the 60-day window and the entire distribution becomes taxable income for the year.

Tax Withholding on the Form

Any eligible rollover distribution paid directly to you carries a flat 20% federal income tax withholding. It isn’t optional.⁵ You can ask Alerus to withhold more if you expect to owe additional tax, but you cannot drop below 20%. The only way to skip the withholding entirely is to choose a direct rollover.⁴

State withholding depends on where you live. Some states let you elect or decline, some require a minimum percentage, and some apply withholding by default but let you opt out with a form. States with no income tax (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming) have nothing withheld at the state level. The Alerus form and the online portal both include a state withholding field. Fill it in. Leaving it blank can trigger the default rate for your state.

If You’re Under 59½

Taking money out before age 59½ adds a 10% additional tax on the taxable portion of the distribution, on top of regular income taxes.⁷ It applies to lump sums, partial distributions, and hardship withdrawals alike. The IRS recognizes exceptions:⁸

Separation from service during or after the year you turn 55 (age 50 for public safety employees in government plans), for distributions from that employer’s plan.
Total and permanent disability as defined by the IRS.
Distributions paid to your beneficiary or estate after your death.
Payments to a former spouse under a Qualified Domestic Relations Order.
Unreimbursed medical expenses above 7.5% of adjusted gross income.
Up to $5,000 per child for qualified birth or adoption expenses.
Up to $22,000 for federally declared disaster losses.
Substantially equal periodic payments calculated under IRS-approved methods, taken for at least five years or until you reach 59½, whichever is longer.
Distributions after a physician certifies a terminal illness.
Amounts distributed because the IRS levied the plan.

If your distribution qualifies for an exception but the plan doesn’t code it correctly on your Form 1099-R, use IRS Form 5329 to claim the exemption when you file your tax return.

Hardship Withdrawals

Not every plan allows hardship withdrawals, and when they do, you have to supply documentation that matches the reason you’re citing. Alerus asks you to keep copies of your supporting documents in case they are audited later. Proof depends on the type of hardship:⁹

Buying a primary residence: a purchase agreement and a lender estimate of the amount needed at closing.
Preventing foreclosure: a lender notice showing the amount required to cure the default.
Preventing eviction: a landlord notice showing the past-due rent.
Casualty loss to your home: repair estimates and insurance information showing what isn’t covered.
Funeral expenses for a parent, spouse, child, dependent, or primary beneficiary: a bill for services.
Tuition and education expenses: a tuition statement for the upcoming school year.
Medical expenses: a bill showing the amount owed after insurance.
Federally declared disaster expenses: repair estimates and documentation that the declaration applies to your primary residence or workplace.

Hardship withdrawals are still subject to regular income tax and, if you’re under 59½, the 10% early withdrawal penalty. They cannot be rolled into another retirement account.

Distributions Ordered in a Divorce

Splitting a 401(k) in a divorce requires a Qualified Domestic Relations Order, a court order instructing the plan administrator to pay a portion of the participant’s benefit to a former spouse (the “alternate payee”). A divorce settlement or marital agreement alone will not do it; the plan needs a QDRO that meets specific federal requirements.¹⁰

A valid QDRO includes the name and mailing address of both the participant and the alternate payee, the dollar amount or percentage assigned, the time period the order covers, and the name of the plan. It cannot require the plan to pay a type of benefit it doesn’t offer or to pay more than the plan provides. Once Alerus receives the signed court order, the plan follows its internal procedures to review and qualify it; only the plan administrator can confirm the order meets QDRO standards. An alternate payee who receives funds under a QDRO can roll them into an IRA, and the QDRO penalty exception means no 10% early withdrawal tax even if the alternate payee is under 59½.⁸

Fees, Timing, and the 1099-R

Alerus deducts an administrative fee from your account for each distribution processed. The amount depends on your employer’s plan; the online portal shows it during the request flow, and your plan sponsor can confirm it.¹

Standard processing is three to five business days once Alerus has the request in good order. In good order means every required field is complete, signatures are in place, and any supporting documents are attached. Direct deposit adds one to two business days for the funds to post to your bank. Mailed checks ship from Saint Paul, Minnesota, so factor in postal transit depending on where you live.¹¹

The following January, Alerus issues a Form 1099-R reporting the gross distribution, the taxable amount, and any federal and state tax withheld. You’ll need it to file your return for the year you took the distribution.

1
Alerus Resource Center. Online Distributions
2
Alerus Resource Center. Where Do I Upload My Distribution Form/Loan Application?
3
Office of the Law Revision Counsel. 26 USC 417 – Definitions and Special Rules for Purposes of Minimum Survivor Annuity Requirements
4
Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans
5
Office of the Law Revision Counsel. 26 USC 3405 – Special Rules for Pensions, Annuities, and Certain Other Deferred Income
6
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
7
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
8
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
9
Alerus Resource Center. Hardship Distribution
10
U.S. Department of Labor. Qualified Domestic Relations Orders Under ERISA
11
Alerus Resource Center. Retirement