Announcing the District’s 403(b) Plan

First Enrollment Deadline: 12/19/08

(to continue participation as of 1/1/09)

The South Burlington School District has adopted a 403(b) plan for its employees that will become effective on January 1, 2009.  The District selected the Vermont State 403(b) Investment Program to be the investment provider for our 403(b) plan.  This is a new plan approved by the State Legislature last session and is being administered by the Office of the State Treasurer. The Vermont State 403(b) Program is overseen by the Vermont State Teachers’ Retirement System and is being administered by Great-West Retirement Services.  The District has chosen this program for several reasons:

1.      Low administrative fees of 0.15% on the total account balance.

2.      Continued monitoring of included funds by the Vermont State Teacher Retirement Board.

3.      The investments available include a combination of index funds and target date allocation funds.

4.      The availability of different levels of Optional Investment Advisory Services.

5.      The plan administrator, Great West, a retirement services company, has excellent local service and a strong reputation for professionalism.

6.      An optional Self Directed Brokerage Account which gives access to numerous mutual funds through Charles Schwab.  Many of the companies that currently receive contributions have funds that can be purchased through this account.  These include USAA Funds, TIAA, American Funds, AIG, and many others. 

Details of the South Burlington Plan Provisions can be accessed here.

HOW TO SIGN UP

Employees are no longer able to make contributions (via payroll deductions) to their current service provider as of January 1, 2009, and must complete and submit a new enrollment form and Salary Reduction Agreement in order to continue participation in the Plan. Here are your forms:

• Salary Reduction Agreement - REQUIRED - This form must be completed and returned to the Payroll Office by 12/19/08 in order to continue participation in the 403(b) Plan effective 1/1/09.  Please be sure to complete ALL sections of the form and return with your Participant Enrollment Form (below).
• Participant Enrollment Form - REQUIRED - This form must be completed and returned to the Payroll Office by 12/19/08 in order to continue participation in the 403(b) Plan effective 1/1/09.  Please be sure to complete ALL sections of the form and return with your Salary Reduction Agreement (below).
• Beneficiary Designation Form - OPTIONAL - This form is only needed if you have more than two beneficiaries.  If needed, please be sure to complete and return to the Payroll Office with your Salary Reduction Agreement and Participant Enrollment Form.
• Incoming Transfer/Direct Rollover form - OPTIONAL - This form will need to be completed and submitted directly to Great-West Retirement Services® if you choose to transfer your existing 403(b) Plan money into the VT State 403(b) Investment Program.
• Voluntary 403(b) Participant Suitability Profile - OPTIONAL - This form only needs to be completed if you schedule a one-on-one meeting with the Great-West Retirement Services®' local representative.  If a meeting is scheduled, please be sure to bring this completed form with you to the meeting.

Frequently Asked Questions

Why are changes being made to the 403(b) provider selection?
The IRS has revised regulations for 403(b) Plans, which are tax-deferred accounts that you are currently investing in through payroll deduction.  The new regulations take effect on January 1, 2009, and will impact how we administer 403(b) plans going forward.  

What happens if the 403(b) Plan fails to comply with the IRS regulations?
Non-compliance with these new rules may result in tax consequences or other risks for the employee, penalties assessed against the district, or plan disqualification.

Which providers will be available to receive contributions as of 1/1/09?
The District selected the Vermont State 403(b) Investment Program as our exclusive provider as of 1/1/09. This Program is overseen by the Vermont State Teachers’ Retirement System and is being administered by Great-West Retirement Services®.

Why was the Vermont State 403(b) Investment Program selected as the sole provider for SBSD?
The State Treasurer’s Office recognized the need for School Districts to comply with the changing IRS regulations and prepared legislation to implement a 403(b) plan.  This plan was approved in May and goes into place on January 1, 2009.  As the exclusive provider of our 403(b) Plan, The Vermont State 403(b) Program was able to meet the requirements of our Plan and provide the necessary services to ensure IRS Code compliance. In addition, the VT State 403(b) Program provides the following:

• Optional Investment Advisory Services to our employees, allowing the employee to select the level of service s/he desires.
• Optional access to a self-directed brokerage account, allowing employees to select from numerous (over 1,000) mutual funds.
• Extremely low and transparent administrative fees that are possible as a result of the size of the participant group. (Rates we would be unable to negotiate on our own due to our limited size.)
• Guaranteed level of service, including on-site consultation services and live phone consultations.
• Investment fund line-up regularly monitored and reviewed by the Vermont State Teachers’ Retirement Board.

What happens to the money held with my current provider?
Starting on January 1, 2009, deductions to 403(b) plans can only be made to our new provider.  Contributions made under your former plans can be made through December 31, 2008 and can stay in your existing plan if an Information Sharing Agreement between that company and the School District exists.  These are the companies who have signed ISA’s with the District so that you may keep you existing account open but make no more contributions:

American Century, American Funds Group, American General, Ameriprise Financial, Calvert Group, Fidelity Investments, GALIC, Horace Mann, Jackson National Life, MassMutual Life, Merrill Lynch, MetLife, MFS Heritage Trust Co., Pacific Life Insurance Co., Penn Mutual, Security Benefits Life Insurance, T Rowe Price, TIAA CREF, USAA, VALIC, Vanguard Group.

If your company does not sign an Information Sharing Agreement, we will contact you during the first week of December.

If you wish to transfer your money from your current provider to the VT State 403(b) Investment Program, you will need to complete an Incoming Transfer/Direct Rollover form.  This form should be directly submitted to Great West Retirement Services.  Your current provider may also have a required form for you to complete. Please be sure to contact your current provider for the necessary form(s). Before transferring your money, please be sure to check with your current provider about any transfer restrictions and/or surrender penalties. 

What investment options are available under the VT State 403(b) Investment Program?
The Vermont State Teachers’ Retirement Board (VSTRB) conducted a thorough search of investment options to include in the 403(b) Program.  In selecting the investment options, VSTRB sought to provide participants with a broad variety of asset classes with the lowest possible fees.  Below is the resulting combination of index funds and target date allocation funds. 

T Rowe Price (Profile Series)

• T Rowe Price Retirement Income Fund
• T Rowe Price Retirement 2010 Fund
• T Rowe Price Retirement 2020 Fund
• T Rowe Price Retirement 2030 Fund
• T Rowe Price Retirement 2040 Fund

Vanguard (Index Funds)

• Vanguard International Stock Index Fund
• Vanguard Small Cap Index Fund
• Vanguard Mid Cap Index Fund
• Vanguard Institutional Index Fund (Large Cap)
• Vanguard Total Bond Market Index Fund

Great West (Fixed Account)

• Great West Portfolio Fund

In addition to the funds listed above, the VT State 403(b) Program also provides access to an optional Self-Directed Brokerage Account (SDBA) offered through Charles Schwab, allowing employees to select from numerous mutual funds for an additional fee or fees.

What fees will be charged to participants of the VT State 403(b) Investment Program?
Click here to see the charts outlining the fees related the services provided under the program.

Who do I contact for more information related to the VT State 403(b) Investment Program?

For additional information about the VT State 403(b) Investment Program and their investment options, please contact Great-West Retirement Services® as follows.

Local Representative:

Jonathan Smith

Phone: (802) 893-7473

E-mail: jonathan.smith@gwrs.com

Corporate Office:

Great-West Retirement Services®

P.O. Box 173764

Denver, CO 80217-3764

Phone #: 1-800-457-1028

Fax #: 1-866-745-5766

Website: www.gwrs.com

What is the maximum amount I can contribute to the 403(b) Plan?

Basic Limit - For the 2008 calendar year, employees under the age of 50 can elect to defer a maximum of $15,500 for the year.  This amount will increase to $16,500 for the 2009 calendar year.  After 2009, the basic elective deferral limit may be adjusted for cost-of-living increases.

Age 50 Catch-up Provision - For the 2008 calendar year, employees age 50 or older can elect to defer an additional $5,000 for the year, for a total maximum deferral of $20,500.  This amount will increase to $5,500 for the 2009 calendar year, for a total maximum deferral of $22,000.  After 2009, the age 50 catch-up deferral limit may be adjusted for cost-of-living increases.