ING is a leading provider of deferred compensation and defined contribution plan education, administration and investment services to governmental plan sponsors and participants. ING through its predecessor companies has provided services to government plans for over 35 years (since 1972). We currently provide investment and/or administrative services to 22 state plans, and over 4,300 cities, counties and municipalities. We have provided services to the State of Kansas since plan inception in 1980.

What is a 457 deferred compensation plan?

A 457 deferred compensation plan is a 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 all earnings are tax-deferred. The amounts accumulated on your behalf are distributed at retirement, or due to another qualifying event, such as separation from service or death.

CONTRIBUTIONS

What is the maximum amount I can contribute to the Plan?

Annual contributions are limited to the lesser of the amounts shown below or 100% of includible compensation.

Year

Annual Maximum

2009 $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 this brochure: “457(b)-How Much Can I Contribute?”.)

How do I increase or decrease my contribution to the Plan?

In order to change your contribution amount, you will need to complete a new Participation Agreement, or click here for ING Access to log into account and make the changes online.

If you are utilizing a paper participation agreement you may increase or decrease every 90 days or suspend at anytime. If you are utilizing the online contribution rate change system, you may increase, decrease or suspend at anytime.

For both methods, it is a federal regulation that increases or decreases to your contributions must be made in the month prior to the pay period for which the change is to be effective. Suspends will be processed as soon as administratively possible.

It is important that you not use the online system for any contribution changes that need to happen on a specific date. Please use the participation agreement for longevity bonuses and last check dump ins.

When am I vested under the Plan?

You are automatically 100% vested immediately upon joining the Plan.

Can I stop contributing to the Plan at any time?

Yes. Your full compensation will be restored in the month following the month your request to stop contributions is received. You will need to complete a Participation Agreement reducing your contribution to zero, or click here for ING Access to log into account and make the changes online. This form must be returned to the Topeka office. The amounts previously contributed will remain in the Plan until you become entitled to a distribution under the Plan provisions.

Can I rollover into the Plan?

Yes. The Plan permits you to rollover benefits from another employer-sponsored eligible retirement plan or traditional IRA. Note that amounts rolled into a governmental 457 plan from another plan type would be subject to the 10% premature penalty tax if distributed prior to age 59 ½ (unless an IRS exception applies).

When are contributions credited and how is interest compounded?

Contributions are credited when received by ING and interest is compounded daily.

DISTRIBUTIONS

When can I receive a distribution of my benefits under the Plan?

Distributions are allowed only upon the following “triggering events”: retirement, severance from employment, death, the occurrence of an unforeseeable emergency, or if your account does not exceed $5,000 and certain conditions are met (see below).

Can I withdraw funds while still employed with the State?

In accordance with Federal Regulations, payment prior to separation from service 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.

What do I need to do when I become entitled to a distribution from the Plan?

You can choose from several options:

Postpone any decision on the payment of your benefits to a future date (no later than the April 1 following the calendar year in which you attain age 70½),

Receive your benefits immediately, under one of the distribution options available under the Plan (please refer to the Payout Options section of this Web site for the available distribution options), or

Rollover your benefits into another employer-sponsored, eligible retirement plan (an eligible retirement plan is a 401 qualified plan, a 403(b) tax deferred annuity program, or another governmental 457 deferred compensation plan) or traditional IRA.

What are the withdrawal fees?

None.

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 unless you previously elected an annuity option.

When am I required to begin receiving distributions?

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).

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 SWO, you elect whether to receive your benefits in a specified amount or over a stated period of time. 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. While you are receiving your SWO payments, you are still able to direct the investment of amounts remaining in the Plan. You may change the amount and timing of your SWO payments, as long as you receive the minimum required distributions under the Plan.

Can I rollover my benefits to another plan?

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:

An unforeseeable emergency withdrawal;

IRS minimum required distributions payable on or after you attain age 70½; and

Periodic payments made over your life or a specified period of 10 years or more.

Amounts rolled from the Plan to another plan type would be subject to any applicable 10% premature penalty tax if distributed prior to age 59½ (unless an IRS exception applies).

I have recently been divorced. How will amounts awarded to my former spouse be taxed?

Amounts awarded and paid to a former spouse as a result of a divorce will be taxable to that former spouse.

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 Topeka office at (800) 232-0024 option 5 to request forms. The representative can answer any questions you have regarding your eligibility for a withdrawal.

How do I find out more about my distribution choices?

Information on your available distribution choices can be found in the Payout 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.

MISCELLANEOUS

How do I change my beneficiary under the Plan?

You can log on to your account here to update your beneficiary. Or complete a new Participant Agreement to change your beneficiary. This form is available on the Forms section of this Web site, and is also available by calling our Topeka office at (800) 232-0024 option 5. The completed form must be returned to the Topeka office.

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.

When am I subject to taxation?

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

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% for federal tax and 5% for Kansas tax will be withheld at the time of payment. However, you may elect to have no withholding withheld.

Amounts distributed from the Plan are not subject to the IRS 10% penalty tax if distributed prior to your 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 to the 10% penalty tax include payments made:

to your beneficiary as a result of your death;

upon your separation from service/retirement on or after you attain age 55;

in substantially equal amounts over your life/life expectancy; or

as a result of your total and permanent disability.

Can I take a loan under the Plan?

Yes. The ability to take a loan was added to the Plan in 2002. This feature is available to State employees, and employees of a city, county or other governmental employer if that employer’s plan includes a loan provision.

How can I change direction on my investments or receive information regarding my account?

You can make investment changes or receive account information by telephone, by calling our integrated telephone line number at (785) 296-7095 or toll-free (800) 232-0024. Follow the menu prompts, and select the option that meets your needs.

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.

When are statements received?

Statements are mailed quarterly, showing all transactions within your account for the quarter. This would include contributions and fund transfers.

Where can I get more information?

Contact the STATE OF KANSAS DEFERRED COMPENSATION PLAN OFFICE:

212 SW 8th Street - Suite 100
Topeka, KS. 66603
TELEPHONE (785) 296-7095
OUTSIDE TOPEKA (800) 232-0024

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.