Aldine ISD 457(b) Savings for Retirement Plan
Frequently Asked Questions

All employees of the District who are members of the Teachers Retirement System of Texas (TRS) are eligible under the Plan.  Please contact PARS or the District Benefits Office to confirm your eligibility under the District’s Plan.

The Aldine Independent School District 457 Savings for Retirement Plan is a 457 Deferred Compensation Plan and is a tax–deferred supplemental retirement Plan sponsored by the District. The Plan is authorized by the Internal Revenue Code (IRC) Section 457(b) and is subject to specific Internal Revenue Service laws and requirements. The Plan allows employees to voluntarily contribute a portion of their compensation on a pre-tax basis. The amount invested, plus earnings, is not taxable until withdrawn from the Plan.

The District contracts with the Public Agency Retirement Services (PARS) and Charles Schwab to provide administrative, investment, and communication services to Plan participants. PARS is the main contact for participants. You can contact PARS by telephone or Internet:

Toll Free:    866.708.3777
Internet:     www.parsinfo.org

You elect the amount you wish to defer from your gross salary each pay period. The amount you elect to defer is withheld from your paycheck each pay period before taxes.

You. There are no employer contributions under this Plan.

You may join the Plan at any time by printing and completing the Voluntary Salary Deferral Agreement from this website or completing the Voluntary Salary Deferral Agreement located in the Aldine Independent School District 457 Savings for Retirement Plan Enrollment Booklet (to obtain a booklet by mail contact PARS). Upon completing the form, submit it to the District Benefits Office. Approximately 2 weeks after submitting your form, you will receive a Confirmation Letter from PARS with instructions on how to log on to the website and view your account.

You can make pre-tax contributions through payroll deductions up to the lesser of 100% of your compensation or the amount listed in the table below. These amounts are indexed for cost-of-living increases as determined each year by the Internal Revenue Service (IRS).

Maximum Annual Contribution – Under Age 50
2010               $16,500
2011 - 2012     TBD indexed to inflation

Maximum Annual Contribution – Age 50 or Older*
2010               $22,000
2011 - 2012     TBD Indexed to inflation in $500 increments

During one of the three calendar years prior to your Normal Retirement Age** you may be able to utilize the Standard Catch-up provision by making additional contributions to the Plan of up to twice the regular deferral limit. This is the maximum contribution and may be significantly lowered depending on how many years you have been eligible to contribute to the Plan and how much you have contributed to the Plan in prior years.

If you would like to have a Worksheet for help in calculating this limit please contact Aldine ISD’s investment advisor to the Plan, TCG Advisors, LP by sending an email to mike.cochran@pension-consulting.com.

*If you are age 50 or older you may utilize the Age 50+ Catch-up provision by making additional contributions to the Plan. During any year in which you are utilizing the Standard Catch-up provision you may not utilize the Age 50+ Catch-up provision. The additional contribution amounts are listed in the table below:

Additional Yearly Contribution Utilizing Age 50+ Catch-up:
2010               $5,500
2011 - 2012     TBD Indexed to inflation

Before utilizing the Standard Catch-up and Age 50+ Catch-up please consult your tax advisor.

**The term “Normal Retirement Age” shall mean the range of ages from the earliest age at which the Participant has the right to retire and receive a retirement benefit, under STRS or PERS, without actuarial or similar reduction because of retirement through and including 70½ as designated by the Participant. Any Participant who works beyond age 70½ may designate a Normal Retirement Age greater than 70½; provided, however, that Normal Retirement Age may not be later than the date or age at which the Participant terminates employment with the Employer.

Initially upon enrollment your contributions are invested as you select on the Voluntary Salary Deferral Agreement.  You will have the option to self–direct your own investments among a wide selection of high quality no-load/no-waive mutual funds or the option of selecting one of three managed portfolios.  If you do not make a selection, your contributions are automatically invested in the Wells Fargo Stable Value Return Fund.  Click here to view the Investment Options.

Approximately 2 weeks after submitting a completed Voluntary Salary Deferral Agreement you will receive a Confirmation Letter from PARS confirming that your account has been established. Once your account is set-up, you have the option of changing your investments and managing your own account online.

If you are changing your investments for the first time, you must complete the Voluntary Salary Deferral Agreement and submit it to PARS, or you may contact PARS at 866-708-3777 to request the form.

If you have already initiated changing your investments, you can make future changes by accessing your account online.

The following transactions can be made online:

·         Move all or a portion of your existing balances between investment options.

·         Change how your future contributions are invested.

You can check your account balance by going to the Check Account page, or you may call PARS toll free at 866-708-3777 to request a statement.

TCG Investment Advisory Services LP has been hired by the District as the investment advisor and fiduciary to the Plan and receives an advisory fee of .45% of account assets annually. PARS is the Trust Administrator and handles the ongoing administration of the Plan for annual fees equal to 0.95% of account assets valued at $0 to $2,500,000, 0.75% of account assets valued at $2,500,001 to $5,000,000, and 0.50% of account assets valued at $5,000,001 to $20,000.000. A one-time distribution fee of $15.00, a $20.00 charge for stop-payment requests, a $5.00 charge for a 1099-R reissue, and a $50.00 charge for any 1099-R revisions will be applied where applicable.
 

·         Attainment of age 70½

·         Death

·         Disability

·         Termination of employment

·         Unforeseen and immediate financial emergency, as defined by federal regulations

·         Receive a lump sum distribution (subject to ordinary income tax)

·         Rollover your account balance

·         Leave in the Plan until a future date (but no later than age 70½ or retirement)

The Internal Revenue Code allows distribution of funds only upon retirement, termination of service with the participating employer, or attainment of age 70½. At the time you terminate service, you may:

·         Keep your money invested in the Plan and, if desired, continue to manage your money within the offered investment options;

·         Withdraw your money – subject to ordinary income tax; or

·         Roll your money to another eligible employer Plan or IRA that accepts rollovers.

The Internal Revenue Code and the Plan contain three provisions that allow withdrawal of funds while still employed. These three provisions, if included in your program, are limited and have strict requirements, which must first be met. They are:

·         An unforeseen emergency must be documented, meet the Internal Revenue Code definitions and criteria, and be approved by the Plan Administrator.

·         A “de minimis” withdrawal – this provision allows a withdrawal while employed if your balance is $5,000 or less, you have not deferred for the last 24 months and have never used this provision before.

·         Attainment of age 70½, but you must stop your deferrals.

Your designated beneficiary(ies) will receive the full value of your account. Your beneficiary(ies) must contact PARS to apply for a distribution.

Yes, loans are available. The minimum loan amount under the Plan is $1,000 and the maximum loan amount is 50% of your account value. Participants with account values less then $2,000 are not eligible for loans. For further information on loans, please contact PARS at 866-708-3777.

To change your salary reduction, complete a new Voluntary Salary Deferral Agreement

To stop your salary deferrals, complete a new Voluntary Salary Deferral Agreement You may begin contributing again to the Plan at any time by completing a new Voluntary Salary Deferral Agreement and submitting it to your District Benefits Office.

To get more information about the Plan or enrolling in the Plan,
please contact PARS at 866-708-3777
or visit the website at www.parsinfo.org

Updated: May 14, 2010