Updated November 2007 Your Deferred Compensation Programs and Supplemental Retirement Plans (SRP) 457 (b) Deferred Compensation Plans, 403(b) Annuities & 403(b)7 Investments Anne Arundel County Public Schools Division of Human Resources HR Benefits 410-222-5221/5219
Table of Contents Your AACPS Retirement Savings Plan...1 Eligibility...1 How Do I Sign Up?...2 Contribution Guidelines...2 Investment Choices...4 Tips on Investing...6 Vendors AIG Retirement... 7 Horace Mann... 7 Lincoln National... 8 Merrill Lynch... 8 Met Life Resources (formerly CitiStreet/Travelers)... 9 Mutual of America... 9 Northwestern Mutual Financial... 9 Prudential... 10 Prudential Securities... 10 SYMETRA... 10
Your AACPS Retirement Savings Plans The 457(b) Deferred Compensation Plan, 403(b) Annuity and 403(b)7 Investment Programs are a great way for you to supplement your retirement savings and are an important component of your retirement benefits available from AACPS! These benefits, in addition to your Maryland State Retirement System and Social Security benefits, can assist you in providing for a secure retirement. These programs are designed to: Help you save regularly on a tax deferred basis Reduce your taxable income and allow you to defer income taxes on dividends and returns Provide you with a broad array of investment options Provide loan and hardship withdrawal options if financial needs necessitate (subject to IRS regulations and plan provisions) Add to your financial security if you retire or become disabled Provide for your beneficiary in case of your death All permanent employees and temporary employees who work 20+ hours per week on a regular basis are eligible to contribute to these retirement savings plans. Since there is a no waiting period requirement, employees are encouraged to review the vendor opportunities presented in this booklet and contact a vendor representative to commence participation. Eligibility 1
How do I sign up for a 457(b), a 403(b) or a 403 (b)7? You may sign up at any time through any of the eligible investment professionals designated in this publication. You should contact the vendor s representative directly. They will set up an appointment with you to review investment options. Because of the effect of compounding of interest, you should consider participating as soon as possible. Once you have made your investment selection, the respective company representative will complete a contract for you to sign. Please read this contract carefully as it contains important information regarding terms specific to your account. This form must be completed by the representative and sent to HR Benefits, before the deduction becomes effective. Please have your representative forward any changes (increases/decreases) in your contributions to HR Benefits. You may terminate your deduction at any time by completing the Authorization for Cancellation of Voluntary Deductions form and submitting it directly to HR Benefits. You are permitted to have deductions from more than one eligible participating company, (including 457(b) and 403 (b) or (b)7 plans or a combination) within the IRS contribution guidelines. Contribution Guidelines The IRS permits you to contribute up to $15,500 in 2008 before taxes (pre-tax) annually to a 457(b), 403(b)/(b)7, or together combined (up to $31,000) to these programs (please note: The IRS limits did not change for 2008). If you are age 50 or older, you may contribute $20,500 to a 403(b)/403(b)7 and 457(b) program in 2008 or a combined total of $41,000. Permanent employees may contribute a percentage of pay, or a flat amount as long as the contribution is at least $25 per pay period. Temporary employees must contribute a percentage of pay (not a flat dollar amount). 2
In summary, here is a brief comparison of the 457(b) and 403(b) & (b)7 annual contribution guidelines: 2007 Contribution limit under age 50 2007 Contribution limit over age 50 2008 Contribution limit under age 50 2008 Contribution limit over age 50 457(b) 403(b)/(b)7 $15,500 $15,500 $20,500 $20,500 $15,500 $15,500 $20,500 $20,500 Payroll reduction Yes Yes Federal/State Tax Deferred Deferred Loan Provision No Yes Investment options Mutual funds and fixed options Insured annuities, mutual funds and fixed options Normal distribution age 10% penalty applies prior to this age 55 59.5 In addition, catch-up provisions, if eligible, may permit additional referrals. Please discuss with your investment representative. Please note 2007 and 2008 limits remain the same per recently announced IRS guidelines (October 2007). 3
457(b) Plan AACPS payroll reduction available through three designated companies: MetLife, John Hancock Financial (represented locally by Northwestern Mutual Financial Network), AIG Retirement (formerly know as AIG VALIC). Investment options are diverse funds are representative of insured annuities, mutual funds, and fixed options. Permits you to contribute up to the IRS maximum limits as well to take advantage of a 403(b) or 403(b)7 up to the combined IRS maximums. Funds available at age 55 with no IRS 10% penalty. 403(b) Plan A Word About Investment Choices Through the various vendors that are available, you will have three main categories of retirement savings plans that you may select from: 457(b) tax deferred compensation plan, 403(b) annuity, and 403(b)7 investment plan. There are several differences between these categories of investments that you should understand when evaluating your supplemental retirement plan choices. Be sure to consider the following information when speaking with the various company representatives. 403(b)s are usually pooled funds and not necessarily the same name mutual funds that you would find listed in the Wall Street Journal. 403(b)s usually have an additional expense charge that is set up as a reserve for mortality expense. These types of investments generally will give you some guarantee, so that your beneficiary would receive at least the value of your contributions, regardless of what the underlying market value was at the time of your death. Expense loads associated with 403(b)s are usually on a rear-end load basis, and they reduce and/or disappear over time, based upon when the investment was made. Some of the plans, however, start a new expense load every time a new deposit is made. 4
Clearly in the evaluation of the suitability of 403(b) investments you should include consideration of the actual expense loads associated with 403(b) investments, as well as how they may disappear over time. 403(b)7 Plan With 403(b)7 investment choices, you will actually be using mutual funds that are listed in the Wall Street Journal. These funds are the registered choices within the family of funds that are identified. The expense charges associated with 403(b)7 investment choices are varied. They can include front-end, rear-end, or a combination of front-end and rear-end loaded expenses. 403(b)7 investments do not have a mortality expense and do not guarantee in the event of death that the beneficiary will receive at least the value of the contributions that were made, regardless of underlying market conditions. The representatives of these funds should discuss in detail the suitability of these actual investments for you as an individual, taking into consideration all other investments you may have. When a product is described as being a front-end load product, it means that the sales expenses are recouped by a load up front or a deduction from the deposit made by the contributor. With front-end load products, there is still an annual expense fee for management of the funds, but the sales expense is extracted when the deposit is made. When a product is referred to as a rear-end load product, it means the sales expenses are received in the form of a surrender charge. Because the annual management fee is larger than the front-end loaded products, the sales expense will diminish to zero over time, based upon when the actual deposit was made. 5
Before you invest...here are some tips Before making any investment, ask plenty of questions until you are confident you understand the program. When you are ready to invest, interview the investment professional(s) you are considering. You should have a thorough understanding of: Your investment professional s qualifications, including licenses and professional designations. The types of investment in each plan. The risks associated with the investments. The potential return of each option. Direct and underlying sales charges associated with the investment. Assistance provided in developing and determining appropriateness of personal investment choices. Ask about access to your account i.e. loan/withdrawal provisions. Ask for a sample statement and how often you receive it and on-line review capabilities. Ask how often you should meet to review investment objectives and fund performance. Ask about surrender charges and other monetary penalities if you decide to transfer your account to another vendor. Ask about the fees on your investments the expense ratio, contract charges, and mortality expenses. Fees can dramatically erode your return over time. Ask the rating of the insurance company. If you select a fixed annuity and the vendor files for bankruptcy your account may not be protected. 6
Supplemental Retirement Plans Programs & Professionals 403(b), 403(b)7 & 457(b) Deferred Compensation Plans AIG Retirement (formerly known as AIG VALIC) 403(b)/457(b) Deferred Compensation Plan & 403(b) Annuity Plan 1304 Concourse Dr. Suite 150 Linthicum, MD 21090 1-800-448-2542 Client Care Center 410-859-2164 Local Office (main number) 800-892-5558 (use appropriate extension number) - voice mail line 410-859-8017 (FAX) New participants may call Ms. Beverly Behegan at 410-859-2346 for referral to appropriate representative Lawrence Campbell lawrence_campbell@aigvalic.com 800-892-5558 x 89478 410-991-3360 (Cell) Steven Hayes steven_hayes@aigvalic.com 800-892-5558 x 88550 410-263-2747 (FAX) 410-991-8667 (Cell) Bart George Certified Financial Planner bart_george@aigvalic.com 800-892-5558 x 88413 410-974-1325 (FAX) Susan Gallant susan_gallant@aigvalic 800-892-5558 x 88267 410-544-1756 (FAX) Diane Bennett diane_bennett@aigvalic.com 800-892-5558 x87810 410-544-4890 (FAX) Horace Mann/Teachers Insurance Company 403(b) Annuity Plan Jeff Hudson 404 Crain Highway, S.W. Glen Burnie, MD 21061 410-760-0420 410-760-1310 (FAX) 800-999-1030 HudsonJ1@notes.horacemann.com 7
Lincoln National 403(b) Annuity Plan Charter Financial Group 8638 Veterans Highway, Suite 301 Millersville, MD 21108 410-987-3590 410-987-3595 (FAX) New participants may contact Mr. Watson at 410-539-0084 for referral to appropriate representatives Chadwick K. Watson chadwick.watson@lfg.com Jeffrey Furniss jeffrey.furniss@lfg.com Warren P. Brockett warren.brockett@lfg.com Lincoln National Academy Financial 1300 York Road, Suite 210 Towson, MD 21204 410-825-0781 1-800-777-4798 410-825-0034 (FAX) Harriet Doherty harriet.doherty@lfg.com Kristin N. Hershey kristin.hershey@lfg.com Merrill Lynch 403(b) Annuity Plan & 403(b)7 Investment Plan Keith M. Hendrick One Park Place, Suite 350 Annapolis, MD 21401 410-263-0156 (Annapolis) 1-800-735-7503 410-702-4262 (FAX) keith_hendrick@ml.com Matthew Schmidt One Park Place, Suite 350 Annapolis, MD 21401 410-263-0152 1-888-545-9330 410-702-4262 (FAX) matthew_schmidt@ml.com New participants may contact Maria Piette at 410-263-0156 to be directed to the appropriate representative. 8
Met Life Resources formerly, Citistreet/Travelers 403(b), 403(b)7, 457(b) Deferred Compensation Plan Retirement Service Division 6700 Alexander Bell Drive, Suite 115 Columbia, MD 21046 443-285-0955 800-446-1615 443-285-0898 (FAX) New participants may contact Howard Friedman at 443-850-4975 or hfriedman@metlife.com for referral to the appropriate representative Beth A. Bechtel bbechtel@metlife.com 800-492-3553 x28031 Paula Preziotti ppreziotti@metlife.com 800-492-3553 x28280 Tom Marney, CFP tmarney@metlife.com 800-492-3553 x28442 (voice mail) 443-520-6557 (Cell) 443-285-0898 (Fax) Mutual of America 403(b) Annuity Plan (only available to existing participants) Renee L. Shew No new/existing contracts only 210 West Pennsylvania Avenue Court Towers, Suite #210 Towson, MD 21204-5301 410 825-7770 410-321-5439 (FAX) Northwestern Mutual Financial 457(b) Deferred Compensation Plan (offered through John Hancock) 575 South Charles St. Suite 300 Baltimore, MD 21201 410-539-0084 410-659-6031 (FAX) New participants may call Mr. Todd Grandy s office at 410-539-0084 for referral to the appropriate representative Jennifer An 410-480-7077 jennifer.an@nmfn.com John Horrigan 443-321-0727 john.horrigan@nmfn.com Hunter Adair 410-480-7066 hunter.adair@nmfn.com Craig Ulep 443-321-0730 craig.ulep@nmfn.com 9
Prudential 403(b) Annuity Plan Jake Marcoux Manager of Financial Services Financial Planner New participants may call for referral to the appropriate representative 303 International Circle, Suite 105 Hunt Valley, MD 21030 410-527-3336 x7321 jake.marcoux@prudential.com Nate Fossett 4920 Elm St., Suite 300 Bethesda, MD 20814 301-986-4800 x7020 301-787-5862 (Cell) 301-986-0223 (FAX) Prudential Securities 403(b)7 Investment Plan (only available to existing participants) Tim Hurtt No new/existing contracts only 250 W. Pratt St., 23rd Fl. Baltimore, MD 21201-2423 410-385-9237 1-800-638-0626 410-727-4682 (FAX) charles.hurtt@wachoviasec.com SYMETRA Financial (formerly SAFECO) 403(b) Annuity Plan & 403(b)7 Investment Plan Symetra Financial 777 108th Ave., NE Bellevue, WA 98004 800-706-0700 www.symetra.com New participants may contact Joanne Henderson, MCRS at 1-800-706-0700 x68786 or joanne.henderson@symetra.com for referral to the appropriate representative. Roger Thusius, CFP 811 Ritchie Highway, Suite 15 Severna Park, MD 21146 1-888-544-4297 410-544-5682 410-544-5501 (FAX) rlt@cornerstoneadvisors.org 10 Ann Thusius Cornerstone Advisors 811 Ritchie Highway, Suite 15 Severna Park, MD 21146 410-544-5682 at@cornerstoneadvisors.org Robin Laird 109 Magnolia Lane Annapolis, MD 21403 410-267-9054 410-518-6353 (FAX) rlaird@hotmail.com Hendershot Financial Group Martin W. Johnson 7401 Bradley Ave. Easton, MD 21601 1-800-242-1421 x2732 301-801-0616 (Cell) mwjo@goeaston.net
Anne Arundel County Public Schools Division of Human Resources HR Benefits Office The Anne Arundel County Public School System does not discriminate on the basis of race, sex, age, national origin, religion, disability, sexual orientation, or familial status in matters affecting employment or in providing access to programs. Questions regarding nondiscrimination should be directed to Mr. Leslie N. Stanton, Specialist in Human Relations, Anne Arundel County Public Schools, 2644 Riva Road, Annapolis, Maryland 21401, (410) 222-5318; TDD (410) 222-5500. www.aacps.org 1999 AACPS Division of Human Resources HR Benefits DPS/JH 2095/1 (Rev. 11/07)