Program Benefits
Welcome to Montgomery County Union's retirement Plan! Whether you are considering enrolling in the Plan or currently are a participant, it's worthwhile to invest a few minutes learning about the fundamentals of Montgomery County Union's Plan and The Hartford's programs. More detailed information about the Plan is available by contacting your Hartford Representative What is a 457 Deferred Compensation Plan?[Return to Top] A 457 plan, also known as a Deferred Compensation Plan (DCP), is a retirement program adopted in accordance with Section 457 of the Internal Revenue Code to allow you to voluntarily save for retirement with pre-tax dollars. 457 plans are generally funded solely with employee salary deduction contributions. 457 Benefits 457 plans offer the following benefits:
Distributions and certain deemed distributions may be subject to ordinary income tax. What Type of Plan is Available to Me?[Return to Top]Montgomery County Union offers a 457 Deferred Compensation Plan. Who can Participate?[Return to Top] All non-temporary executive, judicial or legislative branch employees who are regularly scheduled for 20 or more hours of work per week or who have a fixed annual salary can participate in the Employee 457 Plan. Employees of the Board or Regents' institutions cannot participate. When can I enroll?[Return to Top] You may enroll in the 457 Plan at any time. How do I contribute to the 457 Plan?[Return to Top] Through the convenience of payroll deductions, you can make pre-tax contributions up to the lesser of $15,000 for 2006 or 100% of includible compensation. Your pre-tax contributions - and any earnings - will accumulate tax deferred until withdrawn (generally at retirement), at which time withdrawals will be taxed as ordinary income. Do the Plans Allow Rollover Contributions?[Return to Top] Yes. If you have an existing 457 deferred compensation plan account from a previous employer, you may transfer ("rollover") that account into the 457 Plan at any time. Does Participating Reduce My Social Security Benefits?[Return to Top] No. Your contributions to, or withdrawals from, the Plan will not reduce your social security benefits. What's the Impact to My Taxes?[Return to Top] Your taxable income for federal income tax purposes is reduced by the amount you contribute. For example, if your annual salary is $24,000 and you contribute $2,000 to the Plan, your taxable income is shown as $22,000 on your W-2 form. These adjustments are made automatically through Montgomery County Union's payroll system. Can I Stop My Contributions and Restart Later?[Return to Top] You may start, stop, increase or decrease your contributions at any time. You may stop contributing at any time, and start again at a later date. This enables you to contribute at a pace that fits your budget. What is the "Catch-Up" Provision?[Return to Top] Special "catch-up" rules may allow you to defer more than the normal maximum contributions. They are as follows: Pre-Retirement Catch-Up - You may be able to defer up to an additional $15,000. The pre-retirement catch-up period runs for the three consecutive taxable years ending with the year before the year in which you reach your plan's normal retirement age. Eligible contribution amounts will depend on participant contributions in previous years.To determine if you are eligible for either Catch-Up provision, contact your Hartford Representative. What Are My Investment Choices?[Return to Top] The Hartford conducts extensive qualitative and quantitative analyses across multiple institutional and retail databases to identify top quartile managers representing all asset classes and actively managed investment styles. This in-depth analysis offers the diversity and flexibility you want and need to construct a well-diversified retirement savings program. Narrowed down from a field of more than 600 investments, The Hartford's program offers investment choices that are professionally managed by well known money managers and span some 36 different asset classes. Group Variable Annuity Contracts offer a wide variety of investment choices to meet your needs, including a General (Declared Rate) Account which provides a credited rate of interest. You can direct your contributions into one or more of the available investment choices. Go to the Investment Options section of this site to learn more. Are There Charges for Transfers Between Investment Choices?[Return to Top] There are no additional charges for transfers between investment choices. Are There Any Transfer Restrictions?[Return to Top] You have the flexibility to transfer amounts from one investment choice to another (subject to any plan or regulatory limits). However, you may not transfer amounts directly between Hartford Money Market HLS Inv Opt and the General (Declared Rate) Account as competing investment option restrictions apply. See your Hartford Representative for details. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. In what form must I submit transfers between investment choices? [Return to Top] You are allowed to submit a total of 20 sub-account transfer requests each calendar year for your Participant Account by any permitted means. Once these 20 sub-account transfers have been requested, you may submit any additional sub-account transfer requests only in writing by U.S. Mail. Transfers as a result of Dollar Cost Averaging and Automatic Rebalancing programs do not count toward the 20 transfer limit. Each calendar year, we reset your transfers to allow 20 new sub-account transfers by all approved methods. Please visit retire.hartfordlife.com for more information. Once you access your account, from the Reference menu, select the Tools option. The complete Sub Account Transfer policy can be found within the Education/Reference section. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because Dollar Cost Averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices. The Hartford reserves the right to limit the number of transactions. What is Dollar Cost Averaging and How Can I Use It?[Return to Top] “Dollar cost averaging” is a term used for systematic investing – in other words, you invest a specified dollar amount at regular intervals, regardless of fluctuating price levels in the market. There are two ways you can put dollar cost averaging to work for you:
How you benefit from regularly contributing to your employer’s retirement plan: Because you contribute a certain percentage of your pay each pay period, you systematically invest your contributions throughout various market cycles – thus purchasing more units at lower prices during market downturns, and purchasing fewer units at higher prices during market upswings. Dollar cost averaging involves continuous investing – regardless of fluctuating price levels – so you should consider your financial ability to continue purchasing units during periods of low prices. While dollar cost averaging does not assure a profit or protect against loss in a declining market environment, it can be a sound investment strategy. How to transfer money from one investment to another using dollar cost averaging: Your employer-sponsored retirement program, which is offered through an insurance contract issued by The Hartford, provides for dollar cost averaging Program directly from your account. The Dollar Cost Averaging Program is available to participants in government retirement programs – you may transfer assets from either the General (Declared Rate) Account or Hartford Money Market HLS investment option at set intervals. You decide if these intervals are monthly, quarterly, semi-annually, or annually. To learn more, please be sure to read our article on dollar cost averaging.
What Happens to My Account upon My Death?[Return to Top] If you die prior to age 65 and have not commenced annuity payments, your designated beneficiary(ies) will receive the current value of your account as of the date The Hartford receives satisfactory written proof of your date of death and claim for payment in good order. In the event that you die on or after age 65 and prior to your annuity commencement date, your designated beneficiary(ies) will receive the current value of your account as of the date The Hartford receives satisfactory written proof of your date of death and claim for payment in good order. What Does It Cost to Participate in the 457 Plan?[Return to Top] There are costs associated with the underlying investment choices offered under The Hartford's program. For a complete listing of these fees and charges, please refer to the Investment Option Fee Schedule and the Explanation of Charges and Fees pages in the Investment Options Section of this site. When and How Can I Access My Account Assets?[Return to Top] Your 457 account assets may generally be withdrawn from your 457 Plan under the following qualifying circumstances:
Ordinary income taxes will apply to each withdrawal. The IRS does NOT impose a 10% penalty tax on withdrawals made prior to age 59 ½ from a 457 Deferred Compensation Plan (please note: a 10% penalty may apply if the account has received rollovers from different plan types). Unforeseeable Emergency Withdrawals are subject to the authorization of your employer, Montgomery County Union. Are There any Withdrawal/Surrender Charges?[Return to Top] There are no withdrawal or surrender charges. What if I Terminate Employment Prior to Retirement?[Return to Top] Upon termination from employment, you currently have several options. You may choose to leave your account assets at The Hartford where they will retain their tax-deferred status and continue to remain invested in the investment choices you selected. You may also request a distribution and either liquidate your account (certain restrictions may apply) or you may transfer your account assets into another eligible retirement plan including a traditional Individual Retirement Account (IRA), 401 plan, 403(b) plan or governmental 457 plan. To help you determine what option is right for you, please speak to your Hartford Representative. What is an Unforeseeable Emergency?[Return to Top] Under Internal Revenue Code Section 457, an unforeseeable emergency is a severe financial hardship to the participant, resulting from a sudden and unexpected illness or accident of the participant or of a dependent of the participant. Foreseeable expenses such as transportation, education or the purchase of a new home are not considered unforeseeable emergencies. Your Hartford Representative can provide you with information regarding the Montgomery County Union procedure for requesting an unforeseeable emergency withdrawal. What are My Payout Options under the 457 Plan?[Return to Top] Upon retirement or termination of employment you may select from a number of payout options. You may elect to receive a lump sum distribution. You may also elect a distribution plan under Installment Payments (Systematic Withdrawals). Installment Payments provide you flexibility in selecting the payment amount, timeframe and investment options. By choosing to take a distribution using an installment payment method, your account balances will continue to participate in the performance of the variable investment options. Finally, you may select from several lifetime annuity payout options. For details, call (800) 243-1422 and speak to a Payout Options Representative. How do I Enroll?[Return to Top] To enroll, contact your Hartford Representative. Why Should I Choose The Hartford?[Return to Top] We will provide you with the tools and services that can help enable and empower you to manage your financial future with confidence. We have a strong history of experience in the retirement plan industry and are committed to helping retirement dreams come true - one investor at a time. How Can I Manage My 457 Account?[Return to Top] Your way! The Hartford is here when and how you need us - to offer as much or as little assistance as you want. Our goal is to make managing your financial future as convenient and comfortable as possible. Do You Provide Access to Online Retirement Planning Services?[Return to Top] Accessed through our interactive website, HartfordOnline (retire.hartfordlife.com), The Hartford makes available Morningstar® Online, an Internet-based retirement planning and guidance service providing asset allocation recommendations. This feature integrates investment research, education, asset allocation guidance and many other unique features to give you a comprehensive, web-based approach to investing for retirement from a trusted independent source - Morningstar Associates, LLC. Log on to HartfordOnline today to experience this exciting feature! If you are not enrolled in the plan yet and would like to learn more about this service, please read "Get Investment Guidance. Retire on Target," for more information. Will I Receive Regular Statements?[Return to Top] You will receive a comprehensive 457 Statement of Account each quarter. The statement will show your account balance at the beginning of the period, any activity in the account during the period, the amount of any earnings, account balance at the end of the period, contributions, historical investment option performance and more. Included with your Statement of Account is an informative newsletter, written expressly for retirement investors like you. Who Can I Talk to About My Account?[Return to Top] Your local Hartford Representative is a knowledgeable and valuable resource. He or she can provide you with information to help you make intelligent, informed decisions about your retirement planning strategy. Whether you choose to meet one-on-one for a personal consultation, or attend a variety of educational group meetings at your work site, you can feel confident that you'll receive personal, professional service. See "Getting Started" to learn more. Do I Have Toll Free Account Access?[Return to Top] Yes. In addition to your local representative, you can call 1-800-528-9009 for prompt, professional service. Manage your financial future toll-free by calling The Hartford's Account Access Line. You may speak with a Customer Service Associate or utilize the automated voice or touch-tone system for a variety of account inquiries and financial transactions, including:
Absolutely. You can reach The Hartford's interactive web site, HartfordOnline, at retire.hartfordlife.com. This secure site allows you to view your personal account, make a variety of inquiries and financial transactions, and obtain educational information. Log on today to learn more. The Hartford is committed to helping you reach your retirement objectives with knowledge and confidence. See the possibilities with The Hartford and plan to succeed. This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice. *Withdrawals are subject to ordinary income tax, and if taken prior to age 59 1/2, a 10% federal income tax penalty may apply. Note, there is no early penalty for 457 distributions prior to age 59 ½. |
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