HIGHLIGHTS OF 457 RETIREMENT PLANS

(Tax deductible contribution, tax deferred growth and taxable distribution)

·         457 Plans offer tax deductible contribution, tax deferred growth and taxable distribution.

·         A 457 Plan is a non-qualified deferred compensation plan for states, counties, cities, agencies, and their political subdivisions or agencies.

·         Various 501(3)(c) organizations can have 457 Plans.

·         The Plan is named after IRS Code 457.

·         A 457 Plan is a deferred compensation plan whose purpose is to provide a tax favored vehicle for participants to save for retirement.

·         It is not a qualified retirement under Federal Law.

·         Deferred compensation is a contractual agreement between an organization and an employee wherein the organization makes an unsecured promise to defer the compensation of the employee to some future date for services currently performed by the employee.

·         Prototype plans are available.

·         Plans can be provided by 3rd Party Retirement Plan Administrators. (TPAs)

·         Cost of 3rd Party Retirement Plans can vary substantial dependent on numerous variables.

·         For 2005, voluntary annual contributions can be made through salary deduction up to $14,000 per year.

·         For 2005, a $4000 catch up contribution provision is available for individuals over 50 years of age.

·         Each individual participant decides on his or her contribution and participation level.

·         Employers have the flexibility to provide a match contribution and employer can make non elective contributions or both.

·         The employee does not have any direct claim on the assets.

·         Distributions are made upon retirement, termination of employment, extreme financial hardship or at death to the name beneficiaries.

·         Distributions can be rolled to other 457 Plans, 401Ks, 403Bs, etc. if permitted by new plan.

·         457 Plan rollovers to IRAs are permitted under certain circumstances.

·         Payments received as distributions for 457 Plans are taxable as ordinary income.

·         Distributions can be rolled to an IRA under certain conditions.

·         Effective as of 2002, some flexibility regarding rollovers to other plans and IRAs was made available.

·         No Special tax methods can be used to calculate the IRS liability resulting from payments.

·         Starting in 2004, some organizations can have both 457 Plans and 403b Plans side by side, or other eligible plans and eligible employees can participate fully in both.

·         Lower income participants can receive tax credits based on certain income levels.

·         Various types or securities and insurance products are available to fund 457 Plans.

·         All Mutual Funds, Variable Annuities and Variable Life Insurance policies are offered by prospectus ONLY. For complete information including charges and expenses obtain a prospectus, and read it carefully before you invest.

·         Mutual Fund, Variable Annuity and Variable Life prospectuses are available directly from the issuing companies when product information is requested, and in some cases, they can be downloaded directly on the issuing company's internet website.

·         The tax deferral characteristic associated with variable annuities is not needed when used in an account that is by definition tax deferred (retirement accounts) and according to some sources variable annuities generally have higher fees and internal expenses than mutual funds.

·         Systematic and dollar cost averaging within Mutual Funds, Variable Annuities and Variable Life insurance policies does not assure a profit and does not protect against loss in declining markets. It involves continuous investment in securities regardless of fluctuating prices and the investor should consider his or her financial ability to continue purchases through periods of low price levels.

·         Investing in stocks, bonds, mutual funds, annuities and variable annuities does not guarantee a profit. All of these investments can lose money.

·         Stocks, bonds, mutual funds and variable annuities are not FDIC insured.

·         For specific information on how we can assist you in addressing a wide range of 457 plan related issues and concerns, please click here complete and transmit the form found below

HIGHLIGHTS OF 457(f) SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

·         Generally, 457(f) Plans are used as supplemental plans to “other” qualified plans, i.e. 401k, 403b, etc.

·         These plans are used in the not-for-profit community business sector, and are similar to Non Qualified Deferred Compensation in the corporate (taxable) business sector.

·         457(f) Plans can discriminate amongst employee participation.

·         457(f) Plans by designed have forfeiture provisions under certain conditions.

·         457(f) Plans require some type of ongoing employee-employer relationship.

·         457(f) Plans have no contribution limits, other than “reasonable” compensation.

·         457(f) Plans are employer funded.

·         457(f) Plans are used to attract, retain and reward key employees.

·         457(f) SERP (Supplemental Executive Retirement Plan) plan policies are state specific, and not all insurance companies offer these plan policies to companies and or organizations in all states.

·         The death benefit payable to a beneficiary upon the death of the insured is dependent on the claims paying ability of the issuing life insurance company.

·         For specific information on how we can assist you in addressing a wide range of 457(f) plan related issues and concerns, please click here  complete and transmit the form.

R. D. Winthers & Associates

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