Peach State Reserves 40 1(k) and 457 Plans
W hy save w ith Peach State Reserves? (PSR) Answer: 25% of your life could be spent in retirem ent You could leave em ploym ent with the state before you re vested for pension benefits Portability you can transfer it to another em ployer plan Workers may need half (48%) of their retirem ent incom e to com e from personal savings, including deferred compensation plans* Pre-tax contributions mean tax savings for you * 2006 Retirement Confidence Survey sponsored by CitiStreet
GSEPS 401(k) Em ployer Match Match dollar for dollar on the first 1% of contributions (100% match) For contributions from 2% through 5%, match is 0.50 on the dollar (50% match) Only the first 5% of contributions will be subject to employer match Total match will not exceed 3% of compensation You may contribute more, subject to plan maximums Match is paid every pay period Example: Based on an annual salary of $30,000 paid semi-monthly Contribution % 1% 2% 3% 4% 5% Contribution $ per pay period $12.50 $25.00 $37.50 $50.00 $62.50 Employee may contribute over 5% to the plan, but will only be matched on contributions through the 5 th % Employer Match per pay period $12.50 $18.75 $25.00 $31.25 $37.50 $37.50 No Loans in state 401(k)
GSEPS 40 1(k) Savings Plan You are automatically enrolled at 1% upon date of hire unless you complete an Opt Out form for the 401(k) at the time of hiring You may choose to increase your contributions or stop your contributions at any time by contacting ING Remember to take advantage of the entire matching contribution. The State of Georgia will match you through 5% of your contributions. If you contribute 5% or m ore the state w ill m atch 3% If you stop your contributions, you may re-enroll in the plan any time in the future by contacting ING
40 1(k) Match Vesting 401(k) employer match is subject to a 5-year vesting schedule Years of continuous service After 1 year After 2 years After 3 years After 4 years After 5 years Vested amount 20% 40% 60% 80% 100% ERS developed this presentation to provide general information about your retirement benefits. In the case of any conflict between what is presented here and the laws governing this System, the law will take precedence.
Reduce taxable incom e w ith PSR After Tax PSR Annual pay Pre-tax contribution Income subject to tax Federal taxes* State Tax** $30,000 N/A $30,000 $ 7,500 $1,800 $30,000 -$1,800 $28,200 $7,050 $1,692 Net income After-tax contributions $20,700 $1,800 $19,458 N/A Sp e n d able in co m e $18,900 $19,458 *Assumes a flat 25% tax bracket without the standard deduction. **Assumes Georgia State Tax to be 6.00%
Start early 150 Dollars in thousands Investing $100/month 6% annual return* Jane Starting now... 75 $100,562 $69,787 John 5 years later... 0 3 yrs 5 yrs 10 yrs 15 yrs 20 yrs 25 yrs 30 yrs * Example is based on a hypothetical return of 6%. This example is for illustration purposes only. The returns you experience may be more or less depending on actual investment returns in your account.
Rem em ber Peach State Reserves Offers 2 Different Plans 4 0 1(k ) and 4 57
Plan Com parison Which plan should I choose? 40 1(k) 401(k) contributions are matched by employer up to 3% No withdrawals prior to separation of service except: 59½, even if still employed (except employer contributions) Financial Hardship withdrawal (if approved, employee contributions only) Penalty of 10% for any withdrawal made prior to 59½ (limited exceptions) If married must elect spouse as beneficiary unless spouse waives right to be beneficiary No quarterly fee 457 No withdrawals prior to separation of service except: Unforeseen Emergency withdrawal (if approved) Small balance withdrawal (balance must be less than $5,000.00 and no contributions may have been made within the last 24 months) No early withdrawal penalty regardless of age Can designate anyone as beneficiary Allows for 3 year catch-up contribution prior to retirement Quarterly fee of $8.00 All withdrawals and distributions are considered taxable income and are subject to ordinary federal and state withholding taxes. Note: The information above is for general information purposes only. You should speak with your tax advisor to the application to your specific circumstances.
Plan Com parison How are the 401(k) and 457 similar? Both plans offer the same investment choices Each plan allows for em ployees age 50 or over to contribute m ore money Contributions to both plans are pre-tax When you leave state em ploym ent, either plan m ay be rolled into another em ployer qualified plan or a traditional IRA. Note: 457 m oney rolled over to an IRA, 40 1(k), or 40 3(b) can later be subject to early withdrawal penalties if subsequently withdrawn Both plans assess investm ent m anagem ent fees by fund Combined fee for investment management, securities selection, Plan administration Fees accrue daily and are reflected in the NAV Fees vary by fund and are disclosed on the fund s fact sheet available on the web All fund investment fees are under 1.00% All withdrawals and distributions are considered taxable income and are subject to ordinary federal and state withholding taxes. Note: The information above is for general information purposes only. You should speak with your tax advisor to the application to your specific circumstances.
Plan Com parison Financial Hardship Withdrawals and Loans Both the 401(k) and 457 plans allow for withdrawals due to financial hardship or unforeseeable emergencies under very limited circumstances and it can be very difficult to qualify. Significant documentation and financial disclosure must be provided. There is no guarantee that your withdrawal request will be approved. NO LOANS are available from either the 401(k) or the 457 plan with Peach State Reserves.
Basics for Participating in PSR Enroll any tim e and discontinue participation at any tim e Autom atically enrolled in 40 1(k) at 1% unless you Opt Out upon hire Minim um contribution of 1% of pay on a pre-tax basis (IRS lim it of $ 16,50 0 for 20 10 ) Participants age 50 and over m ay contribute additional $ 5,50 0 to each plan for 20 10 ($ 22,0 0 0.0 0 m ax) May contribute to both 40 1(k) and 457 plans Only 40 1(k) contributions are m atched Choose from a diverse range of investm ent options
PSR account access 24/7 account access Online https:/ / m y GApsr.ingplans.com Phone 1-866-MY-GA-PSR (1-866-694-2777) For TDD, 1-877-766-8891 Participant Service Representatives: weekdays, 8 a.m.-8 p.m.* In-State Plan Consultants: weekdays, 8:30 a.m.-5 p.m.* * Except New York Stock Exchange holidays
PSR core investm ent options Less potential risk/return Stable Value Fund Core Bond Index Fund Active Large Cap Valu e Sto ck Fu n d Active Large Cap Gro w th Sto ck Fu n d Large-Cap Valu e Sto ck In d e x Fu n d Large-Cap Co re Sto ck In d e x Fu n d Large-Cap Gro w th Sto ck In d e x Fu n d Active Sm all/ Mid -Cap Valu e Sto ck Fu n d Active Sm all/ Mid -Cap Gro w th Sto ck Fu n d Mid-Cap Co re Sto ck In d e x Fu n d Small-Cap Co re Sto ck In d e x Fu n d Active Re al Es tate Se cu ritie s Fu n d More potential risk/return Active In te rn atio n al Sto ck Fu n d This slide is for illustrative purposes only. Prior to investing you should review all fund information and consider consulting with your financial advisor.
PSR investm ent options So m any choices. How do I choose? How m uch do I put in stocks? Bonds? Dom estic? International? How do I know I m m aking the right decision? What should I be doing as I get closer to retirem ent?
PSR Lifecy cle Funds Longer time horizon More potential risk/return Lifecycle 20 50 Fund Lifecycle 20 40 Fund Lifecycle 20 30 Fund Lifecycle 20 20 Fund Lifecycle Income Fund Shorter time horizon Less potential risk/return This slide is for illustrative purposes only. Prior to investing you should review all fund information and consider consulting with your financial advisor.
IN G Advisor Service Provides investm ent advice and planning in two ways: Online advice services are included in the cost of the adm inistrative fees assessed to all participants OR Additional fee-based service for Personal Account Manager
IN G Advisor Service cont d Services at no additional cost: Personal Retirement Guide Web-based tool For modeling different saving and investment options To view outcomes of different scenarios Use information to make more informed investing decisions Displays a retirement forecast of current investment choices Provides specific savings and investment recommendations All based on direct participant input
IN G Advisor Service (cont d) Fee-based investment advice: Professional Account Manager Full service option for professional proactive management of your PSR account Fully Flexible you can start or stop the service at any time Getting started: An initial consultation provides a retirement assessment, and specific savings and investment recommendations Ongoing Periodic assessments of progress Proactive investment recommendations Automatic tools to keep you on target
Next steps Jo in in g Pe ach State Re s e rve s 4 0 1( k) is au to m atic u p o n h ire You are autom atically enrolled in to the 40 1(k) upon hire at a rate of 1% Co n tribu te as m u ch as yo u can Don t leave FREE m oney on the table. If you contribute 5% or m ore of your pay, the state will contribute 3% to your account. Contact ING to increase your contributions Set a goal Evalu ate yo u r ris k an d re w ard to le ran ce Re vie w yo u r in ve s tm e n t o p tio n s care fu lly Create a diversified portfolio Re vie w yo u r p o rtfo lio re gu larly U tilize th e Ad vis o r Se rvice
http:/ / m ygapsr.ingplans.com 1-866-MY-GA-PSR (1-866-694-2777)
Im portant Inform ation Today s presentation was designed to: Provide you with fundamental information on your retirement plan(s) Objectively highlight your investment options Outline other sources of information for your decisions Please read all investment information prior to investing Prior to making any investment decisions you should carefully review all fund information This presentation is for general education purposes only and does not, nor is it intended to constitute legal, tax, investment or financial advice. To the extent that you need any such advice you are encouraged to speak with your legal, tax or investment advisor. Any fund performance illustrated in this presentation details historic returns and does not guarantee future investment returns of the funds reviewed. The results you experience may be more or less depending on actual returns. ERS developed this presentation to provide general information about your retirement benefits. In the case of any conflict between what is presented here and the laws governing this System, the law will take precedence. Updated 12/09