State University of New York Voluntary Retirement Savings Programs As an employee of the State University of New York you have access to two different types of voluntary tax-deferred savings programs to help you save money for your retirement. Both of these programs allow you to have money deducted from your paychecks on a pre-tax basis to help supplement your post-retirement income from Social Security and employer sponsored pension plans. Federal and state taxes are deferred until the money is withdrawn upon your retirement or separation from service allowing for even greater savings through tax-deferred growth. - The SUNY Tax-Deferred Annuity Plan is a tax-deferred annuity program authorized under section 403(b)(1) of the Internal Revenue Code. This program is administered by the State University of New York and allows you to choose from among four authorized investment providers; AIG, Fidelity, ING, Met Life and TIAA-CREF. - The New York State Deferred Compensation Plan is authorized Section 457 of the Internal Revenue Service Code. This program is administered by the New York State Deferred Compensation Board and offers 25 investment options over a broad array of investment styles. Both of these tax deferred savings programs are governed by different sections of the Internal Revenue Service Code so there are some differences in plan provisions that you should be aware of. It is particularly important to note that you may participate in both plans concurrently and can currently contribute up to $15,500 to each plan for a combined deferral maximum of up to $31,000 per year if you are participating in both programs! Some of the key provisions of these two programs are outlined below for your convenience. Please be advised that this information is provided for reference purposes only and that official plan documents or authorized vendors should be consulted for more detailed information about these programs before making a decision to invest. Comparison between the SUNY Tax Deferred Annuity 403(b) Plan and the New York State Deferred Compensation 457 Plan (TABLE:) Plan Feature SUNY Tax Deferred 403(b) Plan NYS Deferred Compensation 457 Plan Eligibility and All employees of the All employees of the University Participation University are eligible. are eligible. Requirements Employee Pre-Tax Allowed up to annual Maximum Allowed up to annual Maximum Salary Reduction Contribution Limit. Contribution Limit. Adjustments Contributions Adjustments to contribution to contribution amount may be amount may be made on a made on a biweekly basis. biweekly basis. Vesting Employee voluntary Employee voluntary contributions contributions are fully are fully vested immediately. vested immediately. Maximum Annual limit for 2008 is Annual limit for 2008 is $15,500 Contribution Limit $15,500 as governed by as governed by Section 457(e)(15) Sections 415 and 402(g) of of the Internal Revenue Service Code. the Internal Revenue Higher limits may apply if eligible Service Code. Higher limits for a catch-up provision/s as may apply if eligible for a discussed below. catch-up provision/s as discussed below. Coordination of Because the contribution Because the contribution limits are Contributions limits are separate for seperate for 403(b) and 457 plans, 403(b) and 457 plans, an an employee can contribute up to employee can contribute the annual maximum contribution up to the annual maximum limit to each plan separately. contribution limit to each plan separately. Age 50 Catch-up An additional $5,000 elective An additional $5,000 elective Provision salary deferral (for 2008) salary deferral (for 2008) is permitted for those age is permitted for those age 50 and over. 50 and over. Other Catch-up Employees with 15 consecutive For those within three years of plan's Provision years or more of service (same normal retirement age, an additional amount employer) may contribute up to of up to the lesser of twice the applicable an additoinal $3,000 per year limit or unused amounts from prior years ($15,000 max lifetime). Prior may be contributed. Employees are eligible year contributions may limit for the greater of the enhanced limit or the this amount. Employees are age 50 catch-up provision, but may not do eligible for both age 50 and both in the same year. 15 year catch-up contributions in the same year. Loans Loans are permitted in Loans are permitted in accordance with plan rules. accordance with plan rules. Hardship Available in accordance with Available in accordance with IRS guidelines Distributions IRS guidelines for payment of in the event of severe financial hardship to medical expenses as described the participant resulting from extraordinary in Section 213(d) of Internal and unforeseeable circumstances arising as a Revenue Service Code or to result of events beyond the control of the prevent evicition or participant. foreclosure of primary residence. Rollovers Permitted among IRAs 401(a), Permitted among IRAs, 403(b), 401(a), 401(k), public 457(b) and other 401(k) and other public 457(b) plans. 403(b) plans. Rollovers are Rollovers are not permitted to/from private not permitted to/from private 457(b) plans. 457(b) plans. IRS 10% Premature An IRS 10% premature Generally an IRS 10% premature Distribution Penalty distribution penalty tax distribution penalty tax not applicable. Tax applies unless the However: distribution is due to one of - Amounts rolled over from a 457(b) plan exemptions: to a different plan type is subject to the - On or after reaching age 59 ½ IRS 10% premature distribution penalty - To a beneficiary on account tax if distributed prior to age 59½ of a participant's death (unless an exception applies). - Disability - Amounts rolled over from a non-457(b) - Payments made in at least annual plan to a 457(b) plan continues to be installments over the life (or life subject to any applicable IRS 10% expectancy) of the participant or premature distribution penalty tax, as if the joint lives of the participant the plan were a qualified plan, upon and the designated beneficiary after distribution from the eligible 457(b) separation from service, plan. - Separation from service on or after attainment of age 55, - Payments made for medical care, but not in excess of amounts allowable as a deduction under regulations. - Payments made to an alternate payee pursuant to a QDRO. - Payments made to satisfy a federal tax levy. - Due to a "qualified reservist distribution" Plan to Plan An individual may move 403(b) asets from Upon severance from employment, an Transfers one employer's 403(b) plan to another individual may transfer his 457(b) assets to employer's 403(b) plan provided the an employer's 457(b) plan for which he is individual is an employee or former performing services subject to certain employee of employer whose plan receives requirements. the transer subject to certain requirements. DB Plan Service A tax-free transfer of plan assets to A tax-free transfer of plan assets to Credit Purchase service credits in a governmental defined service credits in a governmental defined benefit plan will be permitted. benefit plan will be permitted. Distribution Options Lump Sums, Systematic Withdrawals, Lump Sums, Systematic Withdrawals Fixed-period payments, Lifetime Annuities Fixed-period payments, and Required and Required Minimum Distribution (RMD). Minimum Distribution (RMD). Minimum A participant must begin receiving A participant must begin receiving Distribution distributions upon reaching age 70 1/2, distributions upon reaching age 70 1/2, Requirements provided s/he has terminated employemnt provided sh/he has terminated employment with SUNY. with SUNY. Revised - July 2008