Your Plan Highlights – Plan Overview

This section does not apply to FICA Alternative employees. Information regarding the FICA Alternative Plan is available by selecting the FICA Alternative tab from the side bar menu on the home page of this website.

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:

Eligibility

The Plan is a voluntary plan available to all full-time employees and permanent part-time employees (hired before January 1, 2004) of the State, and employees of political subdivisions and other public entities 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 must agree to defer a minimum of $12.50 per biweekly pay period.

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

Year	Annual Maximum
2009	$16,500

You may be eligible for increased contributions:

(For additional information on the 457 catch-up provision or the increased contribution limits for participants age 50 or older, please refer to the flyer “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, (and you have separated from employment), 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 required minimum distribution (RMD).

Payment 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 “Payment Options” on this Web site.

Death Benefits

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.

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.

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.

Amounts distributed from a 457 plan are not subject to the IRS 10% penalty tax if distributed prior to 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 include payments made:

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
One Orange Way
Windsor, CT  06096-4774

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

C07-0302-012 (03/07)