State of Connecticut Deferred Compensation 457 Plan

Frequently Asked Questions

The following questions and answers were developed to help you better understand the features and possible benefits under the State’s Plan. This is intended to be an overview of the Plan provisions. If there are any conflicts between these Frequently Asked Questions and the Plan, the Plan provisions prevail.

General

Contributions

Distributions

Miscellaneous

GENERAL

Who is ING?
ING is a leading provider of deferred compensation and defined contribution plan education, administration and investment services to governmental plan sponsors and participants. We, through our predecessor companies, have provided services to government plans for over 30 years (since 1972), and have provided services to the State of Connecticut since 1974.

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What is a 457 deferred compensation plan?
A 457(b) deferred compensation plan is a voluntary retirement plan that allows you to make contributions into an account established on your behalf. Your contributions are made on a pre-tax basis, and any earnings are tax-deferred. Taxes are due when money is distributed from the plan. The amounts accumulated on your behalf are distributed at retirement, or due to another qualifying event, such as severance from employment or death. For additional information regarding the State’s 457 Plan, please see the Plan Overview section.

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Who is eligible to participate in the plan?
Any individual employee of the State or any individual performing services for the State either by appointment or election, including members of the General Assembly, who performs services for the State for which compensation is paid.

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How do I know if I should join the Plan?
The Plan is designed to supplement retirement income. It is not an ordinary savings account that allows withdrawals at any time. Therefore, before deciding whether to join the Plan, you should consider the following:

If you can answer yes to all of these questions, think about joining the Plan. But if your financial situation is such that you should not join at this time, you can join in the future when your financial situation improves.

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How do I enroll in the plan?
You can enroll in the 457 plan at any time during the year. You can enroll in person or by mail. To receive materials prior to enrolling, contact ING at (800) 784-6386 to request an enrollment package and schedule an appointment with a local ING Representative. If you prefer, you can meet with an ING Representative at your work site or at ING’s local office in Windsor. Please see the enrollment process for additional information.

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How are my retirement plan investments protected?
The State of Connecticut selected ING to administer the State’s three defined contribution plans because of its financial strength and experience in managing large governmental plans. Assets in each of the defined contribution plans are held in a separate trust at ING National Trust, a national banking association. These funds cannot be used to satisfy any claims made by creditors of ING. Investment holdings are subject to risks, including the potential for principal loss. For additional information please click here.

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CONTRIBUTIONS

What is the minimum amount I can contribute to the Plan?
$20.00 per pay period is the minimum dollar amount you can contribute.

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What is the maximum amount I can contribute to the Plan?
The IRS limits annual contributions to the lesser of the dollar amount shown below or 100% of includible compensation.

Year	Annual Maximum
2009	$16,500
2010 and beyond	Cost-of-living adjustments applicable to dollar limitations for retirement plans will be announced by the Internal Revenue Service.

You may be eligible for increased contributions under one of the Plan’s catch-up provisions:

Please note: you cannot elect both catch-up provisions in the same calendar year. In addition, the special catch-up is not available to employees eligible to participate in the State of Connecticut 403(b) Plan.

For additional information on these catch-up provisions please click here for the 457 catch-up brochure.

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What is Normal Retirement Age for catch up purposes?
Normal Retirement Age means 70 ½; however you may make a one time election of an alternate Normal Retirement Age that is on or after the earlier of (i) age 65 or (ii) the earliest date that you will become eligible to retire and receive immediate unreduced benefits under the defined benefit plan identified below:

Plan	Retirement Type	Age & Service Requirements for Commencement of Pension Benefits
Tier I	Normal Hazardous Duty	Age 55 with 25 years credited service Age 65 with 10 years credited service Age 70 with 5 years credited service Any age with 20 years hazardous duty service
Tier II	Normal Hazardous Duty	Age 60 with 25 years vesting service Age 62 with 10 years vesting service Age 62 with 5 years actual service – effective 7/1/97 Any age with 20 years hazardous duty service
Tier IIA	Normal Hazardous Duty	Age 60 with 25 years vesting service Age 62 with 10 years vesting service Age 62 with 5 years actual service Any age with 20 years hazardous duty service

You may not select a Normal Retirement Age that is earlier than Age 40 or later than Age 70 ½. Once you have made a one-time election of an alternate Normal Retirement Age, you are not permitted to change that designation.

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How do I increase or decrease my contributions to the Plan?
You will need to complete a new Participation Agreement that authorizes payroll deductions for the new dollar amount. This agreement must be returned to ING’s local office.

You may increase or decrease your contribution amount at any time. However, changes must be made in the month prior to the pay period for which the change is to be effective.

To access the State of Connecticut Participation Agreement Form Click Here.

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Can I stop contributing to the Plan at any time?
Yes. Your request to stop contributions will take effect two pay periods following your request. You will need to complete a Participation Agreement reducing your contribution to zero. This form must be returned to the ING local office. The amounts previously contributed will remain in the Plan until you become entitled to a distribution under the Plan provisions.

To access the State of Connecticut Participation Agreement Form Click Here.

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Can I rollover into the Plan?
Yes. The Plan permits you to rollover benefits from another employer-sponsored eligible retirement plan or traditional IRA. The Plan does not accept rollovers of after-tax dollars.

Rollover assets may be withdrawn without a distributable event; however, non-457 rollover assets will be subject to an Internal Revenue Service (IRS) 10% premature distribution penalty tax if distributed prior to age 59 ½ unless an exception applies.

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When are contributions credited to my account?
Contributions received in good order by the close of business, generally 4 p.m. Eastern Time (ET), on any day the New York Stock Exchange is open will be processed at the close of that same business day and reflected in your account on the next business day. Contributions received in good order after the close of business, generally 4 p.m. Eastern Time (ET) on a New York Stock Exchange business day will be processed as of the close of business on the next business day.

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How is interest compounded?
Interest in the Connecticut Stable Value Fund is compounded daily and credited to your account daily.

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How will contributing to the Plan affect my paycheck?
You can view a hypothetical illustration of how deferrals may affect your paycheck by going to the Calculators on this web site.

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Do contributions affect other benefits like my pension or Social Security?
No. Contributions to this Plan have no effect on your pension or Social Security benefits. These benefits will be based on your total compensation, including amounts you elect to defer into the Plan.

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DISTRIBUTIONS

When can I receive a distribution of my benefits under the Plan?
Distributions are allowed only upon the occurrence of triggering events, like severance from employment, retirement, death or an unforeseeable emergency. The Plan also includes a provision allowing a one time in-service distribution of account values of $5,000 or less, if you have not made contributions to the Plan during the previous two years and you have not received this type of in-service distribution from the Plan in the past.

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When am I required to begin receiving distributions?
The IRS requires that distributions under the Plan begin no later than the April 1st of the calendar year following the calendar year in which you attain age 70 ½ or retire, whichever is later. These rules are referred to as IRS required minimum distributions.

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Can I withdraw funds while still employed with the State?
In accordance with IRS Regulations, payment prior to severance from employment is only permitted if you qualify for an unforeseeable emergency withdrawal or if your account balance does not exceed $5,000 and you have not contributed to the plan for two years prior to this distribution.

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What is an unforeseeable emergency?
An unforeseeable emergency is defined as a severe financial hardship resulting from:

Upon receiving an unforeseeable emergency withdrawal, your contributions to the Plan will be suspended for six months.

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How do I obtain forms for a distribution or an unforeseeable emergency withdrawal?
When you become entitled to a distribution under the Plan or incur an unforeseeable emergency, you should call ING’s National Customer Contact Center at (800) 584-6001 to request forms. You may also call our local office at (800) 784-6386 for assistance. Representatives can answer any questions you have regarding your eligibility for a withdrawal.

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What are my options when I am entitled to a distribution?
You can choose from several options

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Once I choose a payment method, can I change how I’d like to receive my benefits?
Yes. If at a later date you decide your existing payment option may not be appropriate for your current situation, you may make a change. (Please note that an annuity payment option may not be revoked.)

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Why should I consider leaving my assets in the Plan when I leave State service?
There are several possible advantages to leaving your assets in the Plan including:

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Are there any fees or a Deferred Sales Charge for distributions from my account?
No. There is no Deferred Sales Charge or a fee for distributions that you receive from your account.

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What is a systematic withdrawal option (SWO)? How and when are benefits paid under SWO?
A systematic withdrawal option, or SWO, is one of the forms of periodic payment options available for the distribution of your benefits under the Plan. Under SWO, you elect whether to receive your benefits in a specified amount or over a stated period of time, subject to certain requirements. While you are receiving your SWO payments, you are still able to direct the investment of amounts remaining in your account. You may change the amount and timing of your SWO payments, as long as the minimum requirements are met and you continue to receive the Required Minimum Distributions (if applicable) under the Plan.

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How and when are benefits paid under SWO?
You can choose from the following two SWO options:

Once your election is made, ING will pay your installment payments automatically in the method you select. You may choose to receive benefits monthly, quarterly, semi-annually or annually.

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Can I rollover my benefits to another plan or IRA?
Yes. At retirement or severance from employment, you are permitted to rollover your benefits to another employer-sponsored eligible retirement plan or traditional IRA.

All distributions are eligible for rollover except for:

Amounts rolled from the Plan to another plan type (other than another governmental 457 plan) would be subject to any applicable IRA 10% premature distribution penalty tax if distributed prior to age 59 ½ (unless an IRS exception applies).

Please contact our local office at (800) 784-6386 for additional information on distributions and eligibility for rollover. To request a rollover, you will need to complete a Termination/Distribution Request Authorization form, available by calling the Customer Contact Center at (800) 584-6001.

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When am I subject to taxation?
All of the payments you receive from the 457 Plan are subject to Federal and State Income taxes when distributed to you.

Federal income tax withholding will apply to your payments, as described below, based on whether you are eligible to rollover the distribution.

Amounts distributed from the Plan are not subject to the IRA 10% premature distribution penalty tax if distributed prior to your attaining age 59 ½. However, if you have previously rolled over amounts from a plan (including a traditional IRA) other than a government 457 plan, such rollover amounts will be subject to this IRS 10% premature distribution penalty tax if distributed prior to attaining age 59 ½, unless an IRS exception applies.

ING does not offer legal or tax advice. Please seek the advice of your own legal or tax advisor prior to making a tax-related investment decision.

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I have recently been divorced. How will amounts awarded to my former spouse be taxed?
Your former spouse can leave amounts awarded as a result of a divorce, pursuant to a qualified domestic relations order (QDRO) in an account in the Plan or can rollover the account to another eligible retirement plan or IRA without being taxed. Any amounts paid directly to a former spouse from the Plan will be taxable when a distribution is made.

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How do I find out more about my distribution choices?
Information on your available distribution choices can be found in the Payment Options section of this Web site. In addition, ING’s local representatives are available to meet with you individually to discuss your specific situation and distribution options under the Plan.

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MISCALLANEOUS

What are the fees under the Plan?
A Third Party Administration (TPA) fee is deducted from your account monthly at an annual rate of 0.12% of balance held in each investment option other than the Hartford Capital Appreciation HLS fund, Fidelity® VIP Contrafund® Portfolio and Fidelity® VIP Mid Cap Portfolio. For these three investment options only, the fund’s distributor pays, from its own revenue, a service fee to ING at an annual rate of 0.12% of plan balances in the fund. ING accepts these payments in lieu of assessing a direct TPA fee with respect to these funds. There are no other fees under the plan such as deferred sales charges or maintenance fees. Investment management fees may apply. Refer to the investment options fact sheets CLICK HERE.

You should consider the investment objectives, risks, and charges and expenses of the investment options carefully before investing. Prospectuses containing this and other information can be obtained by calling 1-800-584-6001. Please read this information carefully before investing.

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How do I change my beneficiary under the Plan?
Beneficiary Maintenance is now available online. On this Web site go to Account Access and log into your personal account on ING Access. On the left menu, go to My Account and click on Beneficiary Information. You can view your beneficiary information on your account, change your beneficiary designation, update contact information for your beneficiary, and receive immediate online confirmation and written confirmation via U.S. mail.

A paper form is also available. The Beneficiary Designation form is available on this web site under the Forms section, and is also available by calling (800) 584-6001 and speaking with a customer service representative. You may also call our local office at (800) 784-6386 for assistance. The completed form should be returned to ING at the address indicated on the upper right corner of the beneficiary form.

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Why is it important to designate a plan beneficiary since I already have named a beneficiary for other State benefits?
The beneficiary you designate under the 457 Plan is separate from any designation you may have made under the State’s pension plan or group life coverage. To ensure that death benefits under the Plan are paid to the individual(s) of your choice, you should periodically review your plan beneficiary designation(s) and determine whether any changes are appropriate. This is especially true if you have a life change event (e.g., marriage, birth of a child, divorce or death).

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What happens if I don’t designate a Plan beneficiary?
If you do not name a beneficiary (or if your beneficiary dies before you), death benefits will be paid to your estate.

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Are loans available under the 457 Plan?
Loans are not available under the Plan.

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How can I change direction on my investments or receive information regarding my account?
To make changes or receive information, please contact ING’s Customer Contact Center toll-free number at (800) 584-6001. A Customer Service Associate is available Monday – Friday, 8:00 a.m. – 9:00 p.m. E.T. The automated voice response system is available 24 hours a day, 7 days a week. You can also make changes or obtain account information through this Web site through the Account Access menu button on the left. A confirmation of activity will be generated and mailed to you within two days for any financial transaction.

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How quickly will my transaction requests be processed?
Transactions received in good order by the close of business, generally 4 p.m. Eastern Time (ET), on any day the New York Stock Exchange is open will be processed at the close of that same business day and reflected in your account on the next business day. Transaction requests received in good order after the close of business, generally 4 p.m. Eastern Time (ET) on a New York Stock Exchange business day will be processed as of the close of business on the next business day. All transactions are processed within these timeframes regardless of whether you use the Internet, automated voice response system or talk with a customer service associate.

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Will ING confirm the transaction I make?
Yes. Any time you make a change to the manner in which your ongoing contributions are invested or the way your current account is invested, a written confirmation will be mailed to your home within two days of the date the transaction is made. You will receive this confirmation if you make financial transactions over the Internet, automated voice response system or by talking with a customer service associate.

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Are there any transaction fees if I make a change using the Internet? What if I use the toll-free telephone line?
No. There are no transaction fees associated with any of the transactions you make with ING, whether you make them using the Internet, the automated voice response unit or by speaking with a live customer service associate.

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Are there any restrictions on the number of inter-fund transfers and reallocations that I can make on my account?
No unless the request violates ING’s Frequent Trading Policy. ING Actively monitors fund transfer and reallocation activity to identify frequent trading activity. Click here to view ING’s Frequent Trading Policy.

You should consider the investment objectives, risks, and charges and expenses of the investment options carefully before investing. Prospectuses containing this and other information can be obtained by calling 1-800-584-6001. Please read this information carefully before investing.

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Are there redemption fees associated with any of the investment options that are available under the Plan?
Yes. Currently there are three investment options under the Plan which impose redemption fees: the Vanguard® REIT Index Fund, TIAA-CREF Small-Cap Blend Index Fund and TIAA-CREF International Equity. Click here to view the Redemption Fee Policy for each of these funds.

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How can I receive information on fund performance?
You can receive fund performance in a variety of ways”

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Will ING make available daily prices for each of the variable investment options?
Yes. Daily fund prices are available by accessing the Account Access section of this custom Web site.

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How frequently will fund performance be updated? What historical performance will be shown?
Fund performance is updated on a monthly basis. Monthly and quarterly performance reports are available on this web site by selecting the “Investments” Tab on the upper menu and then by selecting “Fund Performance” in the menu along the left side of the Web page. Quarterly performance reports will also be included with your quarterly statements. You will be able to track daily fund prices on this web site when accessing your account through Account Access.

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When are statements received?
Statements are mailed quarterly, showing all transactions within your account for the quarter. This would include contributions, withdrawals and fund transfers. You can also sign up to receive your statements electronically. To do so on this Web site, select Account Access > log in > Go Green!

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What happens if I take a leave of absence without pay?
You will no longer be eligible to participate in the plan and have compensation deferred while on an unpaid leave of absence. You will be able to resume participation upon returning to pay status with the State.

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What happens if I leave service for military duty and then return to work?
The 457 Plan includes specific provisions that allow re-employed military personnel to receive the same benefits under the Plan that they would have been entitled to had they remained in service throughout the period of military service. Contributions under the Plan shall continue to the extent that he or she continues to have compensation paid by the State and has not had a severance from employment. In the event that deferrals cease due to a lack of compensation, contributions will automatically resume when the participant returns from military leave without any action by the participant.

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If I receive accumulated sick or vacation pay, can this be deferred into the Plan?
Yes. You can defer unused sick and vacation pay into the State of Connecticut Deferred Compensation 457 Plan up to the IRS maximum contribution limit. By deferring unused sick and vacation pay, you gain two advantages; putting away more for your retirement and reducing your current taxable income. Remember, taxes are due upon withdrawal or receiving a distribution from the Plan. You must complete and return an updated Deferred Compensation 457 Plan Participation Agreement form the month before you receive your unused sick and vacation pay and before the payroll cut-off date.

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Can I use 457 assets to buy back service under the State’s pension plan?
Yes. You may elect to have any portion of your account balance under the Plan transferred to a defined benefit governmental plan that provides for the acceptance of plan-to-plan transfer.

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Where can I get more information?
Contact the local office at:

ING
PO Box 990069
Hartford, CT 06199-0069
(800) 784-6386

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Insurance products issued by ING Life Insurance and Annuity Company (ILIAC). The 403(b)(7) is a series of mutual funds offered through a custodial account with ING National Trust.Seminars and securities offered through ING Financial Advisers, LLC (member SIPC), One Orange Way, Windsor, CT 06095-4774, or other broker-dealers with which ILIAC has selling agreements.