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Your Plan Highlights – Plan Overview

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

You decide, within certain legal limits, how much of your income you want to defer.

The State (your employer) reduces your paycheck before income tax by that amount and forwards it to ING on a regular basis.

Contributions are invested in the investment options you have selected.

The contributions and any earnings that accumulate are not taxed until they are distributed to you. This is usually at retirement when you may be in a lower tax bracket.

Eligibility

The Plan is a voluntary plan available to all employees of the State, including individuals performing services by appointment or election for which compensation is paid. It is also available to employees of cities, counties, towns and other municipalities that have adopted the State Plan.

There are no age or length of service requirements.

Contributions

Contributions under the Plan are made by participants through a reduction in salary. To participate, you are required to contribute a minimum of $12.00 per pay period. Click here to change your contribution amount through ING Access.

Under the Plan, the maximum annual contribution amount is identified below (or 100% of includible compensation, if less):

Year

Annual Maximum

2010 $16,500

You may be eligible for increased contributions:

During the three consecutive years prior to attaining Normal Retirement Age under a special catch-up provision.

On and after you attain age 50 under an age 50+ catch-up provision.

(For additional information on the 457 catch-up provision or the increased contribution limits for participants age 50 and older, 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 severance from employment, attainment of age 70½, death, or the occurrence of an unforeseeable emergency, which are considered to be triggering events. 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 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).

Payout Options

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

Taxation

All of the payments you receive from the Plan 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.

If you receive a distribution that was eligible to be rolled over, a mandatory 20% will be withheld for federal tax and 5% for Kansas tax purposes at the time of payment.

If you receive a distribution that was not eligible to be rolled over, 10% federal tax and 5% Kansas tax will be withheld at the time of payment. However, you may elect to have no withholding withheld.

Beneficiary/Death Benefit

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. Click here to name or change your beneficiary through ING Access

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. A non-spouse beneficiary is permitted to make a direct rollover of death benefits to an inherited IRA.

Unforeseeable Emergency Withdrawals

IRS guidelines and the plan document provide that an unforeseeable emergency means a severe financial hardship to the participant or beneficiary resulting from:

An illness or accident involving you, your beneficiary, the spouse of you or your beneficiary or a dependent (as defined by the IRS*) of you or your beneficiary;

The loss of your or your beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner's insurance, such as a result of a natural disaster); or

Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your or your beneficiary’s 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

(4) By stopping deferrals under the Plan.

Only the amount necessary to meet the emergency need is available for withdrawal.

*Click here for more information regarding Unforeseen Emergency withdrawals and IRS definition of dependent.

Insurance products issued by ING Life Insurance and Annuity Company. Securities offered through ING Financial Advisers, LLC (member SIPC), One Orange Way, Windsor, CT 06095-4774, or other broker/dealers with which it has a selling agreement.