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What is a 457(b) deferred compensation plan?
A 457(b) deferred compensation plan is a type of plan available to governmental employers, including public schools, as well as other tax-exempt organizations under Section 457(b) of the Internal Revenue Code. With a 457(b) plan, you postpone receiving (defer) a portion of your salary. Your contributions and earnings on those contributions are taxed only when you begin to take distributions.
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What is Opportunity 457?
Opportunity 457 is a 457(b) deferred compensation plan offered by ING. It is funded through a group annuity contract issued by ING Life Insurance and Annuity Company, and offers a menu of retail and institutional investment options from which to build a portfolio.
Important note:
Variable annuities are intended to be long-term investments for retirement purposes. 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 your employer’s 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.
You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options carefully before investing. The disclosure booklet and fund prospectuses contain this and other information. You may obtain a disclosure booklet and fund prospectuses by contacting your ING representative or the Service Center at (800) 677-4636. Please read the information carefully before investing.
How does Opportunity 457 work?
How is Opportunity 457 different from a 403(b) program?
Note: Withdrawals from a 457(b) plan are generally permitted upon your severance from employment, death, or unforeseeable emergency, and will be taxed as ordinary income when received. Account values fluctuate with market conditions, and when surrendered, the principal may be worth more or less than the original amount invested.
What investment options are available?
There are more than 25 investment options available through a variable annuity contract. There is also a fixed interest option. These options, from some of the country's well-known fund companies, span the risk/reward spectrum and allow you to tailor a portfolio to fit your individual risk tolerance. For a complete list of the fund options, click on Investments at the top of this screen.
To receive an information package, including prospectuses that outline the charges and expenses, call the Service Center at 1-800-OPP-INFO (677-4636). Please read the information carefully before you invest or send money.
Contributing to Opportunity 457
The annual contribution limit is equal to 100% of includible compensation (as defined by the IRS) or the annual maximum (see chart below). This annual contribution limit is not reduced for contributions made to a 403(b) program, 401 plan, or IRA.
Year |
Annual maximum |
2009-2010 |
$16,500 |
2011 and later |
Annual cost-of-living increases as announced each year |
"Catch-up" provisions
If you are in the last three years prior to attaining your plan's normal retirement age, you have the opportunity to contribute up to twice the normal amount. There is also a special catch-up for those who are age 50 and older. For more information about the catch-up contributions, contact the Service Center or your ING representative.
What are the fees and charges?
Please refer to the Participant Information booklet and individual fund prospectuses for complete information.
Systematic allocation options
Opportunity 457 offers you the option of having amounts automatically transferred or reallocated between the variable investment options available under the contract. Not all investment options are available for systematic allocation. Ask your local representative for details. Systematic allocation does not ensure a profit or protect against loss in declining markets. You should consider your financial ability to continue purchases during periods of low price levels.
Managing your account
With Opportunity 457, you have several ways to keep track of your investments and to make changes to your account:
If I leave my current job, is my account portable?
Yes. If you go to work for another employer, you can roll over your Opportunity 457 benefits to you new employer's plan if that plan accepts rollovers. If it does not, you can leave your account where it is, or roll the benefits into a traditional IRA. Likewise, you also may be able to roll over benefits from a previous employer's plan to Opportunity 457.
When can I begin receiving distributions?
Generally, withdrawals are allowed when you retire, sever employment, or die. However, a withdrawal can be made to meet an "unforeseeable emergency" as defined by the Internal Revenue Code. In addition, the IRS requires that you begin receiving minimum distributions at the later of when you attain age 70½ or retire.
Payout options at retirement or separation of service
You can receive your benefits in any one of the following ways. Taxes are due at withdrawal, so we suggest you discuss your income tax liability with your accountant or attorney before choosing an option:
Death Benefits
Upon your death, your plan beneficiary will receive benefits according to options/time frames outlined in the plan. If you die before benefits commence and your plan beneficiary is also your spouse, he or she is not required to begin receiving payments any earlier than when you would have reached age 70½.
If you die after benefits have commenced, the balance of your account must be distributed at least as rapidly as under the method in effect at your death.
ING does not offer tax advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.
Opportunity 457 is a deferred compensation plan funded through a variable annuity issued by ING Life Insurance and Annuity Company. 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 disclosure booklet and fund prospectuses contain this and other information. You may obtain a disclosure booklet and fund prospectuses by contacting your ING representative or the Service Center at (800) 677-4636. Please read the information carefully before investing.
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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