Options for rolling over or receiving payment of your HPE 401(k) Plan account

If you choose not to defer payment of your account, you have several choices for how to receive your HPE 401(k) Plan account. Your choice will affect the amount of tax you owe, if any.

Distribution option	How it works
Direct rollover	A direct rollover is a tax-deferred payment of your vested account directly to an individual retirement account (IRA) or another eligible employer retirement plan (for example, another employer’s 401(k) plan). The check is made payable to the custodian of your IRA or trustee of your eligible employer retirement plan and mailed to your address on file. It’s your responsibility to send the check to your new plan or IRA to complete the rollover. If you intend to roll over your account to a new employer’s retirement plan, you should check with your new employer to determine whether the plan accepts rollovers. If your account includes after-tax Roth 401(k) contributions, or after-tax contributions converted to Roth, you should also check with your IRA provider or your new plan to determine whether it accepts Roth 401(k) rollovers.
Direct payment to you	Your vested account is paid directly to you, with mandatory taxes withheld (20% of the taxable portion of your account for federal income taxes, plus any required state income tax withholding). The check is made payable to you and mailed to your address on file. In addition to receiving your entire benefit at once, you can also elect a partial withdrawal or installment payments. If you request a partial withdrawal, you may be required to pay taxes, but you can continue to defer taxes on any amount you leave in the Plan. If you request installment payments, or Systematic Withdrawal Payments (SWPs), you can receive distributions periodically either by check or electronic funds transfer (EFT). You have the flexibility to choose the time frame and frequency of payments. For example, you can receive a fixed dollar amount on a regular basis, have your balance paid out over a fixed number of payments, or set up regular payments to satisfy minimum required distribution requirements. Withdrawal provisions vary based on your age and employment status. Withdrawals will be subject to certain 401(k) Plan fees and taxes. Refer to the Loans and Withdrawals page on NetBenefits for specific information about the options available to you. If you have a balance in the HPE Stock Fund, you can elect to take any whole shares in cash or stock. If you elect stock, you’ll receive a stock certificate for the equivalent number of whole shares you have in the fund, and any remaining balance will be paid in cash. HPE is generally required to withhold 20% of the taxable portion of your account balance for federal income tax purposes (or the entire cash portion of your distribution, if less, for distributions that include shares of stock or outstanding loans). Exceptions to this withholding requirement apply to payments pursuant to certain SWP schedules, such as a schedule to receive approximately equal annual payments over your expected lifetime. At the end of the year, you may owe additional taxes on the distribution, depending on your personal tax situation. Unless you’re age 55 or older by the end of the calendar year in which you leave, you may also be subject to a 10% penalty tax (as well as any applicable state penalties). If you elect a direct payment, you may still be eligible to roll over your payment to an IRA or another eligible employer retirement plan (and defer taxes on your payment) if you do so within 60 days of receiving payment. Mandatory tax withholding will still apply, so you’ll need to make up the amount withheld for taxes, or else you’ll be subject to tax on any portion of your distribution that you don’t roll over.
Partial direct rollover	With this option, you elect to have a partial direct rollover to an IRA or an eligible employer retirement plan, with the remainder of your account paid to you in cash or shares of HPE stock (as applicable).

Distribution option

How it works

Direct rollover

A direct rollover is a tax-deferred payment of your vested account directly to an individual retirement account (IRA) or another eligible employer retirement plan (for example, another employer’s 401(k) plan). The check is made payable to the custodian of your IRA or trustee of your eligible employer retirement plan and mailed to your address on file. It’s your responsibility to send the check to your new plan or IRA to complete the rollover.

If you intend to roll over your account to a new employer’s retirement plan, you should check with your new employer to determine whether the plan accepts rollovers.

If your account includes after-tax Roth 401(k) contributions, or after-tax contributions converted to Roth, you should also check with your IRA provider or your new plan to determine whether it accepts Roth 401(k) rollovers.

Direct payment to you

Your vested account is paid directly to you, with mandatory taxes withheld (20% of the taxable portion of your account for federal income taxes, plus any required state income tax withholding). The check is made payable to you and mailed to your address on file.

In addition to receiving your entire benefit at once, you can also elect a partial withdrawal or installment payments. If you request a partial withdrawal, you may be required to pay taxes, but you can continue to defer taxes on any amount you leave in the Plan.

If you request installment payments, or Systematic Withdrawal Payments (SWPs), you can receive distributions periodically either by check or electronic funds transfer (EFT). You have the flexibility to choose the time frame and frequency of payments. For example, you can receive a fixed dollar amount on a regular basis, have your balance paid out over a fixed number of payments, or set up regular payments to satisfy minimum required distribution requirements. Withdrawal provisions vary based on your age and employment status. Withdrawals will be subject to certain 401(k) Plan fees and taxes. Refer to the Loans and Withdrawals page on NetBenefits for specific information about the options available to you.

If you have a balance in the HPE Stock Fund, you can elect to take any whole shares in cash or stock. If you elect stock, you’ll receive a stock certificate for the equivalent number of whole shares you have in the fund, and any remaining balance will be paid in cash. HPE is generally required to withhold 20% of the taxable portion of your account balance for federal income tax purposes (or the entire cash portion of your distribution, if less, for distributions that include shares of stock or outstanding loans). Exceptions to this withholding requirement apply to payments pursuant to certain SWP schedules, such as a schedule to receive approximately equal annual payments over your expected lifetime.

At the end of the year, you may owe additional taxes on the distribution, depending on your personal tax situation. Unless you’re age 55 or older by the end of the calendar year in which you leave, you may also be subject to a 10% penalty tax (as well as any applicable state penalties).

If you elect a direct payment, you may still be eligible to roll over your payment to an IRA or another eligible employer retirement plan (and defer taxes on your payment) if you do so within 60 days of receiving payment. Mandatory tax withholding will still apply, so you’ll need to make up the amount withheld for taxes, or else you’ll be subject to tax on any portion of your distribution that you don’t roll over.

Partial direct rollover

With this option, you elect to have a partial direct rollover to an IRA or an eligible employer retirement plan, with the remainder of your account paid to you in cash or shares of HPE stock (as applicable).

Your choice of how to receive a lump-sum distribution has important tax consequences. You should read the Participant Distribution Notice/Special Tax Notice for more detailed information about tax consequences. You may also want to consult with a tax expert.

If you defer payment until April 1 following the year you turn age 72 (or April 1 following the year you leave HPE, if later), a portion of your lump-sum distribution will be subject to IRS minimum distribution requirements and won’t be eligible for rollover to an IRA or an eligible employer retirement plan.

If you were born before January 1, 1936, other potentially favorable tax treatments may be available for lump-sum distributions, but only if you choose the “direct payment to you” option and don’t roll over your account balance to an IRA or another eligible employer retirement plan.