City of Roswell, GA 401(a) Retirement Plan Plan # AC:

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1 City of Roswell, GA 401(a) Retirement Plan Plan # AC:

2 Get Free Money!! If you saw an ad like this, you'd probably ask, What's the catch?" No catch The City of Roswell will give you free money when you contribute to your 457 plan. Here s how the plan works. 2

3 A New Retirement Benefit for Roswell Employees Right now the City of Roswell has a pre-tax savings plan called the 457 You may already be participating in the 457, if not, you can sign up at any time. Our new benefit is the 401(a) pre tax savings plan where the COR will match up to 1% of your base annual salary. You must participate in the 457 to be eligible for the 401(a) match. Matching funds will be determined each year by Mayor and Council. 3

4 The Benefits of a 401(a) Plan Employee benefits Accumulate additional funds for retirement Earnings accumulate tax-deferred Pre-tax contributions are not subject to federal and state income taxes until withdrawn Can rollover to a new employers plan or IRA if you leave Roswell Or you have the option to keep your funds in the Roswell 401(a) as long as you like It s never too soon or too late to begin investing. 4

5 Roswell 401(a) Plan Contribution Types Must be enrolled in the 457 to receive the matching funds. For every $1 you contribute to your 457, the City of Roswell will match 50 cents, up to 1% of your base salary. Match is calculated on your base salary (does not include overtime, shift differential, part time pay, etc). Does include City paid PTO, sick pay, military leave, jury duty, comp time and funeral leave. Maximum City of Roswell employer contribution will be 1% for fiscal year 2009 (July 1, 2008 to June 30, 2009). You can contribute less; for example, if a participant saves 1% they will get a match of 1/2% in the 401(a). If you are contributing more than 2% to the 457, you will get 1% matching funds, calculated on your base salary. 5

6 Roswell 401(a) Plan Design You choose a beneficiary must be a spouse if married for the 401(a) only Another beneficiary may be chosen with spousal waiver Vesting schedule 5 years or more of full time employment with the City of Roswell equals 100% vested Starts from date of full time hire Example: If your hire date is June 15, 2004, your City match will be 80% vested. 6

7 Vesting schedule City of Roswell Vesting Schedule Length of Full time Employment % Vested 5 + Years 100% Year 4 80% Year 3 60% Year 2 40% Year 1 20% Less than 1 year 0% 7

8 Roswell 401(a) Plan Withdrawals prior to age 59½ may be subject to a 10% early withdrawal penalty Rollovers to 401(a), 401(k), 403(b), 457 and traditional IRAs subject to vesting Same internet access as your Consolidated statements with the 457 Maximum contribution to the 457 in 2008 is $15,500 or $20,500 if 50 or older 8

9 Roswell 401(a) and 457 Plan Example # 1 Employee Annual Base Salary $35, ($16.83 per hour) Over 12 months: July 1, 2008 to June 30, 2009 Employee contributes 2% into 457 $ ($26.92 per paycheck Pre-tax) City of Roswell contributes 1% max to 401(a) + $ Total contribution $1, You are earning 50% on your savings!!! 9

10 401(a) Worksheet EMPLOYEE ANNUAL BASE SALARY: $0.00 Employee annual contribution of: 0.000% into 457. $0.00 $0.00 (per paycheck pre-tax) City of Roswell annual PERCENT CANNOT contribution: 0.000% EXCEED 1.00% $0.00 TOTAL ANNUAL EMPLOYEE CONTRIBUTION AND CITY MATCH: $0.00 =========== Enter employee base annual salary (excluding OT, Comp, Gift, FTO, OIC, Differential, etc.) Enter percentage of employee contribution into the 457 plan. Employee annual 457 contribution can not exceed $15,500 for 2008 or $20,500 if age 50 or older. 10

11 Investments Over 50 different investment choices You may choose the same or different investments for the 457 and the 401(a) See enrollment kit for list of all options You can schedule an individual appointment during our initial 457 Match Enrollment Meetings in July with our ICMA representative by contacting Gloria Thompson in HR at or ing her at 11

12 A Savings Illustration Take an employee who is age 40 and makes $35,000 per year and elects to save 2% to get the maximum match in the 401(a) (assuming match stays at 1%) If the plans on retirement at age 65 and their investments average a return of 8% per year and their salary grows 2% per year, they can expect to have at age 65: a total balance of $95, which would gross them $ per month for 20 years or $8, annually. That is in addition to their pension which is 100% funded by the City of Roswell! 12

13 Enrollment and Plan Materials City of Vantagepoint Defined Contribution Plan City of Vantagepoint Defined Contribution Plan Investment Basics 13

14 Disclosures 1. Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC. ICMA-RC, or any of its affiliates call (TDD: ) or write to 777 North Capitol Street, NE, Washington, DC You may also visit, us on the Web at Para asistencia en Español llame al A redemption fee may be assessed when fund shares are sold. Funds may also require participants to wait a defined period after redeeming shares to transfer assets back into the fund. Regardless, all funds are monitored for frequent trading. These fees and controls are designed to discourage frequent trading activities that increase costs to the fund and investors. Please refer to the fund prospectuses for guidance on redemption fee and frequent trading terms. Also, refer to ICMA-RC s Frequent Trading Policy for more information. 3. Certificates of Deposit include penalties that may be assessed for withdrawals prior to maturity. Certificates of deposit are offered by banks not affiliated with ICMA-RC. Past performance is no guarantee of future results. 4. A rise/fall in the interest rates can have a significant impact on bond prices and the NAV (net asset value) of the fund. Funds that invest in bonds can lose their value as interest rates rise and an investor can lose principal. 14