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What is a 403(b) plan?
A 403(b) plan is a voluntary retirement savings plan for employees of public schools and certain other 501(c)(3) tax-exempt organizations. With a 403(b) plan, you defer paying current income taxes by contributing money to the plan for retirement.
What is Opportunity Plus?
Opportunity Plus is a 403(b) tax-deferred variable annuity (TDA), issued by ING Life Insurance and Annuity Company. The Opportunity Plus program offers several important features, including a secure Web site and toll-free telephone support.
Important note
Variable annuities are intended to be long-term investments for retirement purposes. Withdrawals taken prior to age 59½ may be subject to an IRS 10% premature distribution penalty tax. Amounts distributed from the annuity will be taxed as ordinary income when received. Account values will fluctuate with market conditions, and when surrendered, the principal may be more or less than its original amount invested. Tax deferral is provided by the plan and the annuity does not provide any additional tax deferral benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable to you.
For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability, age 59½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are “grandfathered” and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988 plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings).
You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses contain this and other information. You may obtain a prospectus by contacting your ING representative or the Opportunity Plus Service Center at (800) 677-4636. Please read the prospectus carefully before investing.
How does a TDA work?
A TDA has two periods: accumulation and annuity (payout). During the accumulation period you simply direct contributions to the investment options you have chosen. The amounts you contribute accumulate earnings based on the returns of the investment options chosen less contract and fund-level charges. Your contributions and earnings accumulate tax-deferred and are taxed when you make a withdrawal, start receiving annuity payments or fail to make a required withdrawal. The second period of a TDA is the annuity period. This is the time when you actually receive your annuity payments.
Is Opportunity Plus right for you? Yes, if…
Diverse investment options
With Opportunity Plus, you can choose among a wide variety of investment options spanning the risk/reward spectrum, from some of the country's well-known fund managers. You determine which options are best for you based on your investment objectives and risk tolerance. For a complete list of the fund options available to you, click on Investments at the top of your screen.
Your contributions are invested in the options you choose, and the return will depend on the performance of those investments, so there is the possibility that your account’s principal may be less than your original investment. However, a variable annuity is a long-term investment for retirement and, in general, investing consistently over long periods of time has the potential to reduce the effects of investment risk and may potentially reduce the chance that you will lose money.
ING offers you many ways to stay on top of your Opportunity Plus account:
* May be unavailable at times for system maintenance.
Contributions
You can increase, decrease, and/or terminate your salary reduction agreement within the limits established by your employer.
Federal law restricts the amount you may contribute to a TDA. In general, the maximum contribution is based on current earnings and years of service with your current employer. The annual limitation on elective deferrals for 2009-2010 is the lesser of 100% of your compensation or $16,500 per year (cost-of-living increases as announced each year thereafter). Exceptions to this general rule do exist and should be investigated.
In addition, if you are an employee who is age 50 or older, you may take advantage of the "Age 50+" catch-up provision, allowing you to contribute an additional $5,500 of pre-tax dollars in 2009-2010 (cost-of-living increases thereafter if applicable). Your employer may also choose to make a matching or non-elective employer contribution to the program over and above your personal limit. For 2009-2010, the total of all employer and employee contributions to your TDA cannot exceed $49,000 or 100% of includible compensation.
Your local representative can help you determine your maximum allowable pre-tax contribution. You can find your local representative from the list provided within the "Contact Us" feature available from the left-hand menu bar on this page. You may also contact ING directly via E-mail.
Roth 403(b)
As of January 1, 2006, the Internal Revenue Code allows 403(b) plans like Opportunity Plus to include a Roth 403(b) option. However, it is up to your employer to elect to offer Roth 403(b). Check with your employer regarding availability of the Roth 403(b) feature in your plan.
Roth 403(b) is similar to the well-known Roth IRA in that you contribute after-tax dollars. Distributions from the Roth 403(b) (including earnings) will be federal income tax free as long as you have met the criteria of a Qualified Distribution and applicable plan rules. A Qualified Distribution is a distribution that is made to you after the Roth 403(b) money is held in the account for at least five years and you are at least age 59½ or disabled. In addition, if you die after having the Roth 403(b) for at least five years, your beneficiaries will receive those funds tax-free. If the distribution is not a qualified distribution, then the accumulated earnings will be subject to tax and an IRS 10% premature distribution penalty tax may apply.
You make contributions to the Roth 403(b) through payroll deduction. The contributions are made on an after-tax basis and are accounted for separately from your pre-tax contributions in the plan.
You can continue to make pre-tax contributions to Opportunity Plus if you start making after-tax “Roth” contributions, as long as the combined amount does not exceed the contribution limit associated with your personal limit. Whether you choose one contribution type versus the other, or a combination of the two, you can tailor your Opportunity Plus account to fit your personal tax planning needs.
Rollovers
Rollover contributions from other 403(b) programs, qualified 401 plans, governmental 457 plans, and traditional IRAs are accepted into Opportunity Plus. Please see your ING representative for more information.
Withdrawals
Opportunity Plus, like all tax-deferred annuity programs, is intended to be a long-term investment vehicle. Any contributions made to the plan after December 31, 1988, and any earnings on your total account value accrued after that date, may only be withdrawn under the following circumstances:
Please Note: Participants who had assets in a TDA before January 1, 1989 can take withdrawals from their plan's cash value (as of December 31, 1988) without meeting the above restrictions. However, the restrictions will apply to salary reduction contributions or any cash value increases made after December 31, 1988.
Withdrawals before age 59½ may be subject to an IRS 10% premature distribution penalty tax, as well as being taxable as ordinary income. The 10% penalty does not apply when distributions are made at separation from service after age 55; are rolled-over to an IRA or other eligible retirement plan (another 403(b) program, a qualified 401 plan, a governmental 457 plan, and a traditional IRA); are due to death or disability; or are taken in substantially equal payments as determined under IRS regulations.
Loans
You may be able to borrow funds from your individual account and continue to defer taxation. Keep in mind that loans and withdrawals may generate an income tax liability, reduce available cash value, and reduce the death benefit. See your contract prospectus and the Opportunity Plus Loan Agreement for further details on the following provisions:
The above loan provisions are subject to change due to changes in the federal laws that govern such provisions.
Distributions
There are several payout options available to you at retirement. With these options, the emphasis is on flexibility. Keep in mind, you must receive at least a minimum distribution by April 1 of the year following the year in which you reach age 70½ or retire, whichever is later, or a 50% penalty may be imposed. All guarantees are based on the claims-paying ability of ING Life Insurance and Annuity Company.
Systematic Withdrawal Option (SWO) - you receive a series of partial withdrawals based on the payment method you select, while keeping the rest of your account value invested.
Life Expectancy Option (LEO) - this option provides for annual payments for a number of years equal to your life expectancy or the expectancy of you and your designated beneficiary. It is designed to meet the substantially equal periodic payment exception to the 10% premature distribution penalty under Tax Code section 72.
Estate Conservation Option (ECO) - according to the Tax Code, you must generally begin taking money from your account by age 70½ or retirement, whichever is later. With ECO, you will automatically receive the minimum amount that the Tax Code requires, while keeping the rest of your account value invested.
ING Income Preserver is an optional minimum guaranteed withdrawal benefit rider available with your Opportunity Plus variable annuity. For an additional fee, participants age 50-75 with at least $25,000 in their Opportunity Plus account and no outstanding loan balance (certain additional restrictions apply) can elect this benefit rider. With ING Income Preserver, you are guaranteed withdrawals of up to a specified amount each calendar year, either for life (if you are at least age 55 when you begin withdrawals) or for a specified period:
The annual fee is currently 0.40% of the guaranteed base. The maximum fee, if you were to reset the benefit, could be up to 1.20% of the base. Benefits under the rider are subject to all the terms and conditions contained in the ING Income Preserver Rider.
Please, keep in mind that withdrawals are still subject to Internal Revenue Code section 403(b) requirements and any applicable tax penalties. Deferred sales charges may also apply.
For more information, please refer to the Contract Prospectus/Prospectus Summary or contact your local ING representative.
The Internal Revenue Code generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability, age 59 ½, severance of employment, or financial hardship (The amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988 plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings)). Amounts held as of 12/31/1988 are "grandfathered" and are not subject to these withdrawal restrictions.
Guarantees are based on the claims-paying ability of ING Life Insurance and Annuity Company.
What happens if I die before I retire?
If you should die before you retire, your beneficiary may receive the money as a lump sum or select one of the settlement options. If your beneficiary is also your spouse and wants to defer receipt of the income, he/she can do this up to the date you would have reached age 70½. If you die, your spousal beneficiary can also rollover your TDA account value to his/her own retirement plan that accepts rollovers or to an Individual Retirement Annuity/Account (IRA).
Guaranteed Death Benefit
For accounts established after 12/31/06:
Generally, the amount of money available to your beneficiary(ies), if you die prior to the start of annuity payments, is guaranteed to be the greater of:
For accounts established prior to 12/31/06:
Generally, the amount of money available to your beneficiary(ies), if you die prior to the start of annuity payments, is guaranteed to be the greater of:
For complete information, please refer to the Contract Prospectus Summary.
Opportunity Plus is a tax-deferred variable annuity issued by ING Life Insurance and Annuity Company (ILIAC). Securities and financial planning offered through ING Financial Advisers, LLC (member SIPC). Securities also offered through other broker-dealers with which ING Financial Advisers, LLC has selling agreements.
You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses contain this and other information. To obtain a copy of the Separate Account and/or fund prospectuses, please call your local ING representative. Or if you would prefer, call the Opportunity Plus Service Center. Please read the information carefully before investing.
ING does not offer tax advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.
Insurance products are offered through ING Life Insurance and Annuity Company (ILIAC), One Orange Way, Windsor, CT 06095-4774. Securities are offered through ING Financial Advisers, LLC (member SIPC) and other broker/dealers with which it has agreements. Custodial services are offered through ING National Trust. These companies are wholly owned subsidiaries of ING Groep N.V. Products and services may not be available in all states.
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