ING is a leading provider of deferred compensation and defined contribution plan education, administration and investment services to governmental plan sponsors and participants. We have provided services to government plans for 30 years (since 1972). We currently provide investment and/or administrative services to 18 state plans, and over 3,500 cities, counties and municipalities.

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 any earnings are tax-deferred. Taxes are due when money is distributed from the plan. 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

2008 and beyond $15,500, annually indexed for cost of living in $500 amounts

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 or older, please refer to the brochure “457(b)-How Much Can I Contribute?” located in the Library section of this Web site.)

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

In order to change your contribution amount, you will need to complete a Payroll Change Deduction Request form that authorizes payroll deductions for the new amount. This form must be returned to our Carson City office.

Changes must be made in the month prior to the beginning of a payroll period.

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 Payroll Change Deduction Request form reducing your contribution to zero. This form must be returned to the Carson City 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).

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, attainment of age 70½ (if separated from service), 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 benefits to a future date (no later than the April 1 following the calendar year in which you attain age 70 ½),

receive your benefits immediately, under one of the distribution options available under the plan (please refer to the Payment 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. (Please note: you will not be permitted to make a change if you previously elected an annuity payment 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% federal excise tax penalty 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, subject to certain requirements. 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 the minimum requirements are met and you receive the minimum required distributions under the Plan. Refer to the “Payment Options” section of this web site for more specifics on SWO.

Can I rollover my benefits to another plan or an IRA?

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 70 1/2; and

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

Amounts rolled from the 457 deferred compensation 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?

Unforeseeable Emergency Withdrawals

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

(1) severe financial hardship resulting from an illness or accident to you, your beneficiary, the spouse of you or your beneficiary or a dependent (as defined by the IRS) of you or your beneficiary;

(2) 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

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

Withdrawals are permitted only to the extent the hardship cannot be relieved: (1) through reimbursement or compensation from insurance or otherwise; (2) by liquidating your assets (to the extent this would not itself cause severe financial hardship); or (3) by stopping deferrals under the Plan. The amount available for distribution is limited to the amount reasonably necessary to satisfy the emergency need (including any amounts necessary to pay federal, state or local income taxes or penalties reasonably anticipated to result from the distribution.)

Participants interested in applying for an Unforeseeable Emergency Withdrawal should contact ING to obtain the appropriate forms. Customer Service Associates are available by calling ING's national Customer Contact Center at (800)-584-6001

Completed forms should be mailed to:

ING
151 Farmington Ave.
Hartford, CT 06156

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

How do I find out more about my distribution choices?

Information on your available distribution choices can be found in the Payment Options section of this Web site. In addition, ING’s local representatives are available to provide you with one-on-one meetings to discuss your distribution options under the Plan.

MISCELLANEOUS

How do I change my beneficiary under the Plan?

You will need to complete a new Beneficiary Designation Form to change your beneficiary designation. This form is available on the Forms section of this Web site, and is also available by calling our customer service center at (800) 584-6001. The completed form should be returned to the address indicated in the top right hand corner of the form.

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 purposes at the time of payment.

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

Amounts distributed from the Plan are not subject to the 10% federal 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% federal 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.

When are statements received?

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

Variable investment options offered under a group funding agreement are considered long-term investments designed for retirement purposes. Money distributed will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions and, when redeemed, the principal may be worth more or less than the amount originally invested. Contact your local ING representative for fund prospectuses containing more complete information including charges and expenses. 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.

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.