San Bernardino City Unified School District
457(b) Deferred Compensation Plan
Frequently Asked Questions

1.  Who can participate?

Employees of the District who are members of the California State Teachers’ Retirement System (STRS) or the California Public Employees’ Retirement System (PERS) with 20 or more regularly assigned hours per week are eligible to participate in the Plan. Please contact PARS or the District payroll office to confirm your eligibility under the District’s Plan.

2.  When may I join?

Current eligible employees may join the Plan at any time.

3.  How do I contribute to the plan?

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
2011 - $16,500
2012 - $17,000

Maximum Annual Contribution – Age 50 or Older*
2011 - $22,000
2012 - $23,000

*If you are Age 50 or older, refer to Catch-up provision below.

4.  Is there a minimum contribution amount?

Yes. There is a minimum deferral amount of $50.00 per month.

5.  Can I rollover or transfer funds from another tax- deferred account to the plan?

If you have an existing qualified retirement plan (pre-tax), 403(b) tax deferred arrangement or governmental 457 plan with a prior employer you may transfer all or part of the balance to the Plan. Please note that you must have had a “distributable event” that entitled you to a distribution from such other plan or account in order to transfer this money to the Plan. Also, if you have a taxable IRA account, you can transfer or rollover that account into this Plan at any time.

6.  Can I make catch-up contributions to the standard plan? Catch-up

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 the 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:          
2011 - $5,500
2012 - $6,000

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

  457 Voluntary Retirement Plan Final 3 Year Catch-up Worksheet

**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.

7.  Can I stop or change my contributions?

You may stop your contributions any time upon written notice. Once you discontinue contributions, you may start again as of any Plan entry date.

You may increase or decrease the amount of your contributions at the beginning of each payroll period provided a completed change form is submitted to the District payroll office at least five (5) days prior to the payroll lock-out.

8.  How do I become “vested” in my plan account?

Vesting refers to your “ownership” of a benefit from the Plan. You are always 100% vested in your Plan contributions and your rollover contributions, plus any
earnings they generate.

9.  How are plan contributions invested?

You give investment directions for your Plan account, selecting from investment choices provided under the Plan, as determined by the District and the Investment Advisor to the Plan, TCG Advisors LP.

You may select from a choice of no-load and load-waived mutual funds, five managed portfolios (where a professional investment advisor manages the funds for you) or a Stable Value Return Fund (similar to a money market account but with somewhat higher returns due to the use of longer maturities on its fixed interest investments).
You may change your investment choices any time.

More information about your Plan’s investment choices can be found later in these materials.

10. Are there fees to the participants in the plan?

The PARS 457(b) Deferred Compensation Plan is being offered through San Bernardino City Unified School District. 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 0.45% 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, 0.50% of account assets valued at $5,000,001 to $20,000.000, 0.33% of account assets valued at $20,000,001 and over. An additional charge of $15.00 will be applied for one-time lump sum distributions, $1.50 per recurring electronic payments, or $3.50 per recurring check payments. If applicable, a $20.00 charge will be applied for stop payment requests, a $5.00 charge for a 1099R reissue and a $50.00 charge for any 1099R revision requests. If requesting a loan, a loan origination fee of $50.00 per loan and an annual loan maintenance fee equal to $25.00 per year shall apply. All fees will be deducted directly from participant accounts.

11. When can money be withdrawn from my plan account?

Money may be withdrawn from your Plan account in these
events:

• Retirement at the Plan’s Normal Retirement Age or 70 ½

• Death

• Termination of employment

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

Be sure to talk to your tax advisor before withdrawing any money from your Plan account.

12. May I withdraw money in case of an unforeseen emergency?

Yes. An unforeseen emergency is a severe and unexpected hardship to you resulting from illness or accident to you or your spouse; loss of your property due to casualty, including the need to rebuild your home following damage to your home not otherwise covered by homeowner’s insurance; or other extraordinary and unforeseeable circumstances arising as a result of events beyond your control. An unforeseen emergency must be documented, meet the Internal Revenue Code definitions and criteria, and be approved by the Plan Administrator. Please refer to the District’s eligibility requirements.

13. May I borrow money from my account?

The Plan is intended to help you put aside money for your retirement. However, the District has included a Plan feature that lets you borrow money from the Plan.

• The amount the Plan may loan is limited by rules under the tax law. In general, all loans will be limited to the lesser of: one-half of your account balance or $50,000.

• The minimum loan amount is $1,000.

• All loans must generally be repaid within five (5) years. A longer term may be available if the loan is to be used to purchase your principal residence.

• You may have one (1) loan outstanding at a time.

• You pay interest back to your account. The interest rate on your loan will be the Prime Rate.

• A $50 processing fee for all new loans and a $25 per year maintenance fee are charged to your account.

Other requirements and limits must be met, and certain fees may apply. Contact PARS at (800) 540-6369 for more details about this participant loan feature.

14. How do I obtain information about my plan account?

You will receive a personalized account statement quarterly. The statement shows your account balance as well as any contributions and earnings credited to your account during the reporting period.

You also have access to an Internet site (www.pars.org) that is designed to give you current information about your Plan account. You can get up-to-date information about your account balance, contributions, investment choices, and other Plan data.

15. How do I enroll?

Simply complete the enrollment form provided and return it to the District payroll office.

Updated: November 8, 2011