Your Plan Highlights – Plan Overview

DCPlus is established under Internal Revenue Code Section 457. Under DCPlus, you postpone receiving (defer) a portion of your salary. It works like this:

Eligibility

Eligible employees for DCPlus are all employees of: 1) an agency under the personnel authority of the Mayor; 2) a subordinate agency as defined in the Comprehensive Merit Personnel Act of 1978; and 3) if approved by the Mayor, an agency not under the personnel authority of the Mayor or an independent agency.

There are no age or length of service requirements.

Contributions

Contributions under the Plan are made by participants through a reduction in salary. A minimum contribution of $20 per biweekly payroll period or $43 per monthly payroll period is required under DCPlus.

•Under the Plan, the maximum annual contribution amount has increased from $8,500 in 2001 to 100% of includible compensation or $16,500 for 2010.

You may be eligible for increased contributions:

(For additional information on the 457 catch-up provision or the increased contribution limits for older-workers, please refer to the brochure “457(b)-How Much Can I Contribute?” located in the library section of this web site.)

Timing of Distributions

Distributions are allowed only upon separation from service, attainment of age 70½, death, or the occurrence of an unforeseeable emergency, which are considered to be triggering events. Distribution of amounts held in rollover accounts may be made without a triggering event. The Plan also includes a provision allowing the in-service distribution of accounts that do not exceed $5,000 if: 1) you have not made any contributions to the 457 Plan during the prior two years; and 2) you have not received this type of in-service distribution in the past.

The IRS requires that distributions under a 457 plan begin no later than the April 1st of the calendar year following the calendar year in which you attain age 70½ or separate from service, whichever occurs later. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not timely distributed. These rules are referred to as IRS minimum required distribution requirements (MRD).

Payment Options

When you are entitled to a distribution of benefits under DCPlus, you have the choice of a variety of payment options. These options are described in the section “Payment Options” on this web site.

Death Benefits

Upon your death, benefits would be payable to the beneficiary(ies) that you designated under the Plan. If you have not designated a beneficiary, payment of death benefits will be made to your estate.

Your beneficiary will be entitled to select from a variety of payment options, which are generally the same options that would have been available to you (and are described in the “Payment Options” section of this web site). Your beneficiary must notify ING of your death and make a payment election in accordance with the Plan.

Taxation

All of the payments you receive from DCPlus are subject to federal and state income taxes.

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

Amounts distributed from a 457 plan are not subject to the IRS 10% penalty tax if distributed prior to attaining age 59½. However, if you have previously rolled over amounts from a plan other than a governmental 457 plan, such rollover amounts will be subject to this 10% penalty tax if distributed prior to attaining age 59½, unless an IRS exception applies. IRS exceptions include payments made:

Unforeseeable Emergency Withdrawals

IRS guidelines and the District’s Plan document provide that an unforeseeable emergency means a severe financial hardship to the Participant resulting from:

(1) a sudden and unexpected illness or accident involving you or one of your dependents (as defined by the IRS);

(2) the loss of your property due to casualty; or

(3) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control.

The purchase of a home, an auto or the need to pay a child’s college expenses, are not considered unforeseeable emergencies. In addition, withdrawals are permitted only to the extent the hardship cannot be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidating your assets (to the extent this would not itself cause severe financial hardship); (3) by borrowing from commercial sources to the extent that this borrowing would not itself cause severe financial hardship; or (4) by stopping deferrals under the Plan. Only the amount necessary to meet the emergency need is available for withdrawal.

Click here for additional information on unforeseeable emergency withdrawals, including reasons that do and do not qualify for a withdrawal.

Group annuities offered through a retirement plan are long-term investments designed for retirement purposes. Money distributed will be taxed as ordinary income in the year received. Account values fluctuate with market conditions and, when surrendered, the principal may be worth more or less than the original amount invested. Fund prospectuses and a participant Information Booklet containing complete information, including expenses, are available. Please read them carefully before you invest. 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.