Peach State Reserves 401(k) and 457 Plans

Peach State Reserves 40 1(k) and 457 Plans
W hy save w ith Peach State Reserves? (PSR)
Answer:
25% of your life could be spent in retirem ent
You could leave em ploym ent with the state before you re
vested for pension benefits
Portability you can transfer it to another em ployer plan
Workers may need half (48%) of their retirem ent incom e to
com e from personal savings, including deferred
compensation plans*
Pre-tax contributions mean tax savings for you
* 2006 Retirement Confidence Survey sponsored by CitiStreet
GSEPS 40 1(k) Em ploy er Match
Match dollar for dollar on the first
1% of contributions (100% match)
For contributions from 2% through
5%, match is 0.50 on the dollar
(50% match)
Only the first 5% of contributions
will be subject to employer match
Total m atch will not exceed 3% of
compensation
You may contribute more, subject
to plan maximums
Match is paid every pay period
Example:
Based on an annual salary of $30,000 paid
semi-monthly
Contribution $
per pay
period
Employer Match
per pay period
1%
$12.50
$12.50
2%
$25.00
$18.75
3%
$37.50
$25.00
4%
$50.00
$31.25
5%
$62.50
$37.50
Contribution
%
Employee may contribute over 5% to
the plan, but will only be matched on
contributions through the 5th%
$37.50
No Loans in state 401(k)
GSEPS
40 1(k) Savings Plan
You are autom atically enrolled at 1% upon date of hire unless
you complete an Opt Out form for the 40 1(k) at the tim e of
hiring
You may choose to increase your contributions or stop your
contributions at any time by contacting ING
Remember to take advantage of the entire matching contribution. The
State of Georgia will m atch you through 5% of your contributions.
If y ou contribute 5% or m ore the state w ill m atch 3%
If you stop your contributions, you may re-enroll in the plan any time
in the future by contacting ING
40 1(k) Match Vesting
401(k) employer match is subject to a 5-year vesting schedule
Years of continuous
service
Vested amount
After 1 year
20%
After 2 years
40%
After 3 years
60%
After 4 years
80%
After 5 years
100%
ERS developed this presentation to provide general information about your retirement
benefits. In the case of any conflict between what is presented here and the laws
governing this System, the law will take precedence.
Reduce taxable incom e w ith PSR
After Tax
PSR
Annual pay
Pre-tax contribution
Income subject to tax
Federal taxes*
State Tax**
$30,000
N/A
$30,000
$ 7,500
$1,800
$30,000
-$1,800
$28,200
$7,050
$1,692
Net income
After-tax contributions
$20,700
$1,800
$19,458
N/A
Sp e n d able in co m e
$18,900
$19,458
*Assumes a flat 25% tax bracket without the standard deduction.
**Assumes Georgia State Tax to be 6.00%
Start early
Dollars in
thousands
Investing $100/month
6% annual return*
150
$100,562
$69,787
Jane
Starting now . . .
75
John
0
5 years later . . .
3 yrs
5 yrs
10 yrs 15 yrs 20 yrs 25 yrs 30 yrs
* Example is based on a hypothetical return of 6%. This example is for illustration purposes only. The
returns you experience may be more or less depending on actual investment returns in your account.
Rem em ber Peach State Reserves Offers 2 Different Plans
4 0 1( k )
and
4 57
Plan Com parison
Which plan should I choose?
40 1(k)
457
401(k) contributions are matched
by employer up to 3%
No withdrawals prior to
separation of service except:
No withdrawals prior to separation of
service except:
59½ , even if still employed (except
employer contributions)
Financial Hardship withdrawal (if
approved, employee contributions
only)
Penalty of 10% for any
withdrawal made prior to 59½
(limited exceptions)
If married must elect spouse as
beneficiary unless spouse waives
right to be beneficiary
No quarterly fee
Unforeseen Emergency withdrawal (if
approved)
Small balance withdrawal (balance must be
less than $5,000.00 and no contributions
may have been made within the last 24
months)
No early withdrawal penalty
regardless of age
Can designate anyone as beneficiary
Allows for 3 year catch-up
contribution prior to retirement
Quarterly fee of $8.00
All withdrawals and distributions are considered taxable income and are subject to ordinary federal and state
withholding taxes. Note: The information above is for general information purposes only. You should speak with your
tax advisor to the application to your specific circumstances.
Plan Com parison
How are the 401(k) and 457 similar?
Both plans offer the same investment choices
Each plan allows for em ployees age 50 or over to contribute m ore money
Contributions to both plans are pre-tax
When you leave state em ploym ent, either plan m ay be rolled into another
em ployer qualified plan or a traditional IRA.
Note: 457 m oney rolled over to an IRA, 40 1(k), or 40 3(b) can later be subject to early
withdrawal penalties if subsequently withdrawn
Both plans assess investm ent m anagem ent fees by fund
Combined fee for investment management, securities selection, Plan administration
Fees accrue daily and are reflected in the NAV
Fees vary by fund and are disclosed on the fund s fact sheet available on the web
All fund investment fees are under 1.00%
All withdrawals and distributions are considered taxable income and are subject to ordinary federal and state
withholding taxes. Note: The information above is for general information purposes only. You should speak
with your tax advisor to the application to your specific circumstances.
Plan Com parison
Financial Hardship Withdrawals and Loans
Both the 40 1(k) and 457 plans allow for withdrawals due
to financial hardship or unforeseeable em ergencies under
very lim ited circum stances and it can be very difficult to
qualify. Significant docum entation and financial
disclosure m ust be provided. There is no guarantee that
your withdrawal request will be approved.
NO LOANS are available from either the 40 1(k) or the 457
plan with Peach State Reserves.
Basics for Participating in PSR
Enroll any tim e and discontinue participation at any tim e
Autom atically enrolled in 40 1(k) at 1% unless you Opt Out upon
hire
Minim um contribution of 1% of pay on a pre-tax basis
(IRS lim it of $ 16,50 0 for 20 10 )
Participants age 50 and over m ay contribute additional
$ 5,50 0 to each plan for 20 10 ($ 22,0 0 0 .0 0 m ax)
May contribute to both 40 1(k) and 457 plans
Only 40 1(k) contributions are m atched
Choose from a diverse range of investm ent options
PSR account access
24/7 account access
Online
https:/ / m y GApsr.ingplans.com
Phone
1-866-MY-GA-PSR (1-866-694-2777)
For TDD, 1-877-766-8891
Participant Service Representatives: weekdays, 8 a.m .-8 p.m.*
In-State Plan Consultants: weekdays, 8:30 a.m.-5 p.m.*
* Except New York Stock Exchange holidays
PSR core investm ent options
Less potential risk/return
Stable Value Fund
Core Bond Index Fund
Active Large Cap Valu e Sto ck Fu n d
Active Large Cap Gro w th Sto ck Fu n d
Large-Cap Valu e Sto ck In d e x Fu n d
Large-Cap Co re Sto ck In d e x Fu n d
Large-Cap Gro w th Sto ck In d e x Fu n d
Active Sm all/ Mid -Cap Valu e Sto ck Fu n d
Active Sm all/ Mid -Cap Gro w th Sto ck Fu n d
Mid-Cap Co re Sto ck In d e x Fu n d
Small-Cap Co re Sto ck In d e x Fu n d
Active Re al Es tate Se cu ritie s Fu n d
More potential risk/return
Active In te rn atio n al Sto ck Fu n d
This slide is for illustrative purposes only. Prior to investing you should review all
fund information and consider consulting with your financial advisor.
PSR investm ent options
So m any choices. How do I choose?
How m uch do I put in stocks? Bonds? Dom estic? International?
How do I know I m m aking the right decision?
What should I be doing as I get closer to retirem ent?
PSR Lifecy cle Funds
Longer time horizon
More potential risk/return
Lifecycle 20 50 Fund
Lifecycle 20 40 Fund
Lifecycle 20 30 Fund
Lifecycle 20 20 Fund
Lifecycle Income Fund
Shorter time horizon
Less potential risk/return
This slide is for illustrative purposes only. Prior to investing you should review all fund
information and consider consulting with your financial advisor.
IN G Advisor Service
Provides investm ent advice and planning in two ways:
Online advice services are included in the cost of the
adm inistrative fees assessed to all participants
OR
Additional fee-based service for Personal Account Manager
IN G Advisor Service cont d
Services at no additional cost:
Personal Retirement Guide Web-based tool
For modeling different saving and investment options
To view outcomes of different scenarios
Use information to make more informed investing decisions
Displays a retirement forecast of current investment choices
Provides specific savings and investment recommendations
All based on direct participant input
IN G Advisor Service (cont d)
Fee-based investment advice:
Professional Account Manager
Full service option for professional proactive management
of your PSR account
Fully Flexible
you can start or stop the service at any time
Getting started:
An initial consultation provides a retirement assessment, and
specific savings and investment recommendations
Ongoing
Periodic assessments of progress
Proactive investment recommendations
Automatic tools to keep you on target
Next steps
Jo in in g Pe ach State Re s e rve s 4 0 1( k) is au to m atic u p o n h ire
You are autom atically enrolled in to the 40 1(k) upon hire at a rate of 1%
Co n tribu te as m u ch as yo u can
Don t leave FREE m oney on the table. If you contribute 5% or m ore of
your pay, the state will contribute 3% to your account.
Contact ING to increase your contributions
Set a goal
Evalu ate yo u r ris k an d re w ard to le ran ce
Re vie w yo u r in ve s tm e n t o p tio n s care fu lly
Create a diversified portfolio
Re vie w yo u r p o rtfo lio re gu larly
U tilize th e Ad vis o r Se rvice
http:/ / m y GApsr.ingplans.com
1-866-MY-GA-PSR
(1-866-694-2777)
Im portant Inform ation
Today s presentation was designed to:
Provide you with fundamental information on your retirement plan(s)
Objectively highlight your investment options
Outline other sources of information for your decisions
Please read all investment information prior to investing
Prior to making any investment decisions you should carefully review all fund information This
presentation is for general education purposes only and does not, nor is it intended
to constitute legal, tax, investment or financial advice. To the extent that you need any such
advice you are encouraged to speak with your legal, tax or investment advisor.
Any fund performance illustrated in this presentation details historic returns and does not
guarantee future investment returns of the funds reviewed. The results you experience may be
more or less depending on actual returns.
ERS developed this presentation to provide general information about your retirement
benefits. In the case of any conflict between what is presented here and the laws governing this
System, the law will take precedence.
Updated 12/09