CITY OF DALLAS 457 DEFERRED COMPENSATION PLAN IMPORTANT NOTICE TO APPLICANTS

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1 CITY OF DALLAS 457 DEFERRED COMPENSATION PLAN IMPORTANT NOTICE TO APPLICANTS The Internal Revenue Code permits 457 Plan participants to withdraw funds from their account, as a source of last resort, to pay for an unforeseeable emergency. The Internal Revenue Code contains strict guidelines with respect to the definitions of an unforeseeable emergency. In reviewing applications, the 457 Plan Board must ensure that the withdrawal complies with the Internal Revenue Code in order to protect the tax-deferred status of all participants assets in the City s 457 Plan. An unforeseeable emergency is defined as a severe financial hardship resulting from: An illness or accident to you, your spouse or your dependent(s); Loss of your property due to casualty; or Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control. An unforeseeable emergency is to be determined based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of an unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through: a) reimbursement or compensation from insurance or otherwise; b) liquidation of your assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; c) cessation of deferrals to your 457 or 401(k) Plan; or d) a loan from a financial institution or from your 457 or 401(k) Plan. Examples of situations that are not unforeseeable emergencies are unpaid rent, mortgage, loan or utility bills; routine medical or dental bills; personal bankruptcy (unless resulting directly and solely from illness or casualty loss); or purchase of an auto. Distributions because of an unforeseeable emergency must be limited to the amount reasonably necessary to satisfy the emergency need (which may include federal income tax withholding). Your contributions to the 457 Plan were deducted from your gross income and no income taxes were withheld. If your hardship request is approved, the amount withdrawn will be reported to the IRS and must be included in your gross income. The Internal Revenue Code requires that a distribution from the 457 Plan be adequately documented to ensure compliance with the above requirements. In order to ensure timely review of your application, you must provide all the information requested and fully document the circumstances with respect to your unforeseeable emergency. Submit your completed application to the Deferred Compensation Office, 1500 Marilla Street, Room 1BS, Dallas, Texas If you have questions, you can call Phone messages will generally be returned within two business days. CITY OF DALLAS 457 DEFERRED COMPENSATION PLAN BOARD Rev. September

2 INSTRUCTIONS FOR COMPLETING THE APPLICATION READ THOROUGHLY The 457 Plan has specific guidelines set by the Internal Revenue Service (IRS) relating to withdrawals. These rules must be strictly followed to protect the tax-deferred status of all participants assets in the Plan. Withdrawals are to be used as a source of last resort for an unforeseeable emergency. All documentation must be provided to support the application and to document the amount requested. Section 1. Complete the Participant Information. Section 2. Explain briefly and directly the reasons for your application. You may attach a second sheet of paper if necessary. Section 3. List the expenses directly related to your unforeseen emergency. Delinquencies not caused by an emergency do not qualify for withdrawals. If necessary, contact the Plan Administrator regarding the specific nature and required documentation for your withdrawal situation. Do not list total balances owed on Credit Cards, Mortgage Loans, Car Loans, etc. These balances represent future obligations and are not considered an unforeseeable emergency in the present. Payments that are two or more months behind may be listed, if they are related to your financial hardship (if caused by loss of income). You must provide detailed billing statements for medical/dental expenses that show you owe a balance. You must also provide your Explanation of Benefits statements from your health insurance carrier which lists the amount paid toward your medical/dental expenses as well as the amount of your responsibility. If your application is due to a dental emergency, a letter from your dentist explaining the unforeseeable emergency is needed. Please include a letter from the creditor confirming that a payment plan is not allowed for the expenses that have caused this application. Section 4. Copies of current account statements are required for savings, checking, 401(k), 457, IRAs, stocks and bonds. Section 5. You are required to list all household incomes on a monthly basis. Therefore, if your income is bi-weekly you must multiply each figure by two. The numbers may be rounded to the nearest dollar. For example, if your Gross Pay is $1,286.04, the $1, X 2 = $2, $2, will be listed on the Gross Pay line for your salary. Do the same for Federal Tax, all the other deductions and Net Income. You are required to supply a copy of your pay stub (no more than two months old), your spouse s pay stub and other income listed that will verify the figures listed in this section. Section 6. Letter size photocopies of all expenses listed below must be provided for you and your current dependent(s) or member(s) of your household for whom you are financially responsible. Note: Letter size photocopies of Food and Clothing expenses (6d) are not required. Details for documenting each expense category are set forth below. a Home Mortgage or Rent payments - This may be documented with a photocopy of the mortgage stub, money order, letter from a landlord, copy of a lease agreement. No check carbons. b Basic Utilities - Photocopies of Electric, Water, Gas and Telephone Bills must be provided if they are included in this category. If you do not have a particular bill or cannot provide a photocopy of a money order, do not add it in the figure listed. 2

3 c Other Utilities Photocopies of Cable, Cell Phone, Internet, Home Security bills must be provided if they are included in this category. d Food and Clothing - Provide a reasonable estimate. e Car Payments - Photocopies of the loan stub, money order, etc. f Other Transportation Expenses - Provide a reasonable estimate for gas, bus passes, parking, etc. g Credit Cards - Letter size photocopies must be provided for any credit cards listed. Only the minimum payments required should be listed. For example, if your minimum payment to Visa is $20.00 and your minimum to Discover is $29.00, list the total of $ If you have a balance on a card but do not owe this month, then do not list it. Do not list what you normally pay. Only minimums are considered. Do not list credit consolidation companies or finance companies (i.e. CCCS). These payments should be listed as Other and must have a corresponding letter size photocopy. h College Expenses - If you are currently paying college expenses for yourself or a dependent, then you may list the expense by taking an average for the current semester and providing supporting documentation or by providing a current bill owed and listing that bill. i Insurance Premiums - Letter size photocopies must be provided for all insurance premiums not payroll deducted. If your car insurance is not paid on a monthly basis, then an average monthly figure may be computed from a quarterly or semi-annual premium. j Child Support Letter size photocopies must be provided of the divorce decree and documentation supporting the payments. k Other - List any other expenses for which you can provide letter size photocopies verifying amounts listed and being paid. Such expenses may include Day Care, Bank Loans, Finance Companies, etc. Section 7. a Tax Return Provide letter size photocopy of your most recently filed tax return. b Bank Loan - You must apply for a loan at a bank, credit union or other financial institution and supply a copy of the application for the loan as well as the response from the institution showing denial of the loan. c Pay Stubs Provide letter size photocopies of your most recent pay stubs for the time in which you experienced your unforeseen emergency as well as your most current pay stub for yourself and spouse (if applicable.) d Bank Statements Provide copies of all checking/savings account statements. e Investment Account Statements - Including 401(k), 457, IRAs, personal mutual fund and brokerage accounts. Section 8. Sign and date the form. 3

4 The paperwork should be neat, clean and unfolded and stapled in the following order: 1. Application Cover Page (Page 5) 2. Application (Pages 6, 7 & 8) 3. Required Documentation 4. Checklist (Page 9) The deadline for all COMPLETED paperwork is the 10th of every month by 4:00 PM. Due to the number of applications received it is recommended that you make every effort to submit all COMPLETED paperwork several days before the deadline. This will give you time to correct any mistakes or gather any additional paperwork necessary to complete your application. If your application is not complete (which includes missing documentation/copies) by 4:00 PM on the day of the deadline it may be held over until next month s Board meeting. You will be notified via phone or of the progress of your review and/or other documentation needed for your specific situation. If you have questions or need clarification regarding this process, please call (214) Your call will generally be returned within two business days (unless otherwise noted on voice mail). 4

5 CITY OF DALLAS 457 PLAN APPLICATION COVER PAGE Employee Information: Name SSN: Home Telephone: Work Telephone: Mobile Telephone: Employee ID # Address (Work / Personal): Amount Requested: _Current Balance: _ Reason for Application: Medical/Dental Expenses Loss of Income Uninsured Property Loss Funeral Expenses Other: (Explain) Reviewer s Recommendation: Amount Recommended: Approve Deny Request More Information Board Action: Approve Amount Approved: Case Number: Deny Request More Information Date 5

6 APPLICATION The information contained in this application is of a confidential nature and is requested solely for review by the 457 Plan Board and authorized representatives of the Plan Administrator. The information will not be used for any other purpose. Please complete in ink. Section 1. PARTICIPANT NAME: SSN: STREET ADDRESS: CITY: STATE: ZIP CODE: EMPLOYER: CITY OF DALLAS_ DEPARTMENT: AMOUNT CURRENTLY BEING DEFERRED PER PAY PERIOD: CURRENT BALANCE: DATE: Section 2. ATTACH A SEPARATE SHEET IF MORE SPACE NEEDED (A) WHAT WAS THE UNFORESEEN EVENT? (B) WHAT IS THE RESULTING HARDSHIP? Section 3. PLEASE LIST THE EXPENSES DIRECTLY RELATED TO THIS UNFORESEEN EMERGENCY WHICH YOU ARE LEGALLY OBLIGATED TO PAY AND NAME OF PAYEE: UNFORESEEN EMERGENCY EXPENSES & PAYEE AMOUNT TOTAL AMOUNT: Section 4. 6

7 FINANCIAL INFORMATION: CURRENT AMOUNT Cash Checking/Savings Accounts Stocks and Bonds 401(k)/457/IRA Accounts 401(k) Loan Balance 457 Loan Balance All Other Assets (List): TOTAL AMOUNT: Section 5. CURRENT MONTHLY INCOME COMPUTED FROM PAY STUBS Your Spouse s Other Total Salary Salary Income Gross Pay $ $ $ $ Less: Federal Tax $ $ $ $ FICA/Soc Sec Tax $ $ $ $ City/Other Retirement $ $ $ $ 457/401(k) $ $ $ $ Other $ $ $ $ Net Income $ $ $ $ Section 6. MONTHLY LIVING EXPENSES: Provide documentation/copies to support these expenses. If an expense is included on a pay stub as a deduction, no additional documentation is needed. Please see page 9 for a checklist of all documentation required. a. Home Mortgage Payment or Rent $ b. Basic Utilities (Electric, Gas, Water, Telephone) (Within Last Two Months) $ c. Other Utilities (Cable, Cell, Internet, Home Security) $ d. Food and Clothing Allowance (Estimate) $ e. Car Payment(s) $ f. Other Transportation Expenses (Gas, Bus, Parking)) $ g. Credit Card Payment(s) (Combined Total,-Minimum Required Payments) $ h. College Expenses $ i. Insurance Premiums (Home, Renters, Auto, Life) $ j. Child Support $ k. Other (list): $ $ $ TOTAL AMOUNT: $ 7

8 Section 7. OTHER FINANCIAL DOCUMENTS: Provide documentation/copies to support these items. Please see page 9 for a checklist of all documentation required. a. Tax Return (Most Recently Filed Tax Return) b. Bank Loan (Loan Application and Denial) c. Pay Stubs (Current and During Period of Financial Hardship) d. Bank Statements (Checking and Savings Accounts) e. Investment Account Statements (401(k), 457, IRA and Other Personal Investment Accounts) I HEREBY CERTIFY THAT THE STATEMENTS AND FIGURES SHOWN ON THIS APPLICATION AND THE ATTACHMENTS THERETO ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND THAT I HAVE READ AND UNDERSTAND THIS APPLICATION. I UNDERSTAND THAT THIS APPLICATION WILL BE RETAINED BY THE PLAN ADMINISTRATOR WHETHER OR NOT IT IS APPROVED. I HEREBY AUTHORIZE THE PLAN ADMINISTRATOR TO CONTACT ANY OF THE THIRD PARTIES REFERENCED IN THIS APPLICATION OR ATTACHMENTS THERETO IN ORDER TO VERIFY AND/OR SUPPLEMENT INFORMATION FURNISHED BY ME. SUBMISSION OF FALSE INFORMATION OR DOCUMENTS WITH THIS FORM MAY RESULT IN CRIMINAL PENALTIES. Section 8. SIGNATURE: DATE: 8

9 DOCUMENTATION CHECKLIST Failure to provide the required documentation may result in your application being returned for completion. Our goal is to process your request as quickly as possible and in order to submit your request for review all the necessary documentation must be provided. Check below to confirm copies of statements, loan stubs, money orders, etc. are enclosed Home Mortgage or Rent Payments Basic Utilities Electric Water Gas Home Phone (s) Other Utilities : Cable/Satellite TV Cell Phone Internet Long Distance Home Security Medical/Dental Expenses Not Covered By Insurance Car Payments (Loan Stub or Proof of Payment) Credit Card Statements (Must show minimum payment(s) due) College Expenses Insurance Premiums Auto Home Other insurance not deducted via payroll Child Support - (See Section 6j of the Instructions)) Other Day Care Bank Loans Finance Companies (i.e. Consumer Credit Counseling) Tax Return (Previous Year) Loan Application and Denial Letter From A Financial Institution Pay Stubs Letter From Creditor That A Payment Plan Is Not Allowable. Bank Statements Checking Savings Investment Account Statements 401(k) / 457 Mutual Fund Brokerage IRA(s) 9