PLEASE REVIEW THE FOLLOWING INFORMATION BEFORE SUBMITTING PAPERWORK TO FIRST FINANCIAL: TO ESTABLISH A NEW OR MAKE CHANGES TO AN EXISTING 457 ACCOUNT:

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1 PLEASE REVIEW THE FOLLOWING INFORMATION BEFORE SUBMITTING PAPERWORK TO FIRST FINANCIAL: TO ESTABLISH A NEW OR MAKE CHANGES TO AN EXISTING 457 ACCOUNT: Employees will need contact Jasper Purvis, with First Financial Capital, regarding 457 Deferred Compensation Investments with ING at or by at jasper.purvis@ffga.com. TO ESTABLISH A NEW 403(b)/403(b)(7) ACCOUNT Select a company from the list of approved vendors ( Complete all paperwork required by the vendor to establish a 403(b) Complete First Financial s Salary Reduction Agreement (may also need to complete Grandfathered accounts form is you have an existing account that is not approved by TRS). Complete the TRS Uniform Disclosure Notice. TO INCREASE, DECREASE, OR STOP A CURRENT 403(b)/403(b)(7) REDUCTION Complete First Financial Administrators Salary Reduction Agreement only. AGENTS Complete the School District Rules for Solicitation and Processing of 403(b) and 403(b)(7) Accounts form for the current school year. You can obtain the required forms by visiting our web page at then clicking on Retirement Services. EMPLOYEES & AGENTS Once you have completed all necessary forms, please send them to the attention of Carolyn Torres, Retirement Services Department: Regular mail: Overnight mail: First Financial Administrators, Inc. or First Financial Administrators, Inc. P.O. Box N. Sam Houston Pkwy E., 5 th Floor Houston, Texas Houston, Texas *CONTACT US BY: PHONE: / FAX: sharon.conner@ffga.com ashley.dominguez@ffga.com elizabeth.gomez@ffga.com betty.james@ffga.com carolyn.torres@ffga.com

2 403(b) Salary Reduction Agreement P.O.BOX Houston, Texas Phone Number: (800) Fax Number: (281) FFASRA -12/05 First Name Middle Initial Last Name Social Security # Home Address City State Zip Code Home Phone# ( ) Date of Birth Date Hired Annual Salary $ Employer / School District Campus Code (Ector Co. Only) Work Phone# ( ) # of Pay Periods Other (CIRCLE ONE) Completed by: EFFECTIVE DATE: As soon as possible Later: (Pay date) / / READ IMPORTANT: THIS FORM REPLACES AND CANCELS ALL PREVIOUS AGREEMENTS ON FILE. VENDOR CODES REQUIRED FOR CALIFORNIA SCHOOLS ONLY. LIST ALL NEW AND EXISTING COMPANIES BELOW: Amount Per Pay Period 403(b) Pre-Tax Amount Per Pay Period Roth 403(b) After-Tax ACTION TAKEN N-New I- Increase D- Decrease R Resume E Existing S- Stop Company Name/ Vendor Code (CA only) $ $ Circle One - N I D R E S Company Name/ Vendor Code (CA only) $ $ Company Name/ Vendor Code (CA only) $ $ Circle One - N I D R E S Circle One - N I D R E S TOTAL PER PAY PERIOD $ $ NEW COMPANY REMITTANCE ADDRESS: ADDRESS REQUIRED FOR NEW ACCOUNTS ONLY HAVE YOU TAKEN A HARDSHIP WITHDRAWAL IN THE LAST 6 MONTHS? Y OR N (CIRCLE) IF YES, INDICATE DATE TAKEN? Eligible and participating in the Age 50 + Catch-Up provision. Eligible and would like to participate in the 15 Year Catch-Up provision. Complete the following: Total past contributions with current Employer through the end of the last calendar year, (include both, Employer and Employee contributions) 403(b) $ (Employee) 401(K) $ (Employee) 403(b) $ (Employer) 401(K) $ (Employer) Please provide the total amount of excess funds contributed under the 15 Year Catch-Up provision if being utilized currently or if utilized in the past. $ 1. I authorize the Employer and the Employer agrees to reduce the Employee s salary by the amount stated above and remit to the Provider Company of choice for the purchase of an annuity eligible under Section 403(b) and/or Section 403(b)(7) of the Internal Revenue Code as amended, providing retirement benefits for the Employee. The Employee s rights to such annuity are nonforfeitable. 2. This agreement shall be legally binding and irrevocable while employment continues, provided however, that either party may change or terminate this agreement by giving notice in writing at least 30 days prior to the effective date of such change or termination. 3. The Employee is responsible for the accuracy of the excludable amounts stated in this Agreement. Any overstatement of the amounts excludable as a salary reduction in this agreement, or any other violation of the requirement of Section 403(b) could result in additional taxes, interests, and penalties to the Employee. Employee Signature Date Agent/Broker Name (Print) Date Agent/Broker Signature Phone Number:

3 SCHOOL DISTRICT RULES FOR SOLICITATION AND PROCESSING OF 403(b) AND 403(b)(7) ACCOUNTS 1) We request that each agent sign this form and return to First Financial Administrators, Inc. by July 15 of each year. 2) There will be no solicitation of 403(b) and/or 403(b)(7) accounts on any school district property (unless the district has granted a prior exception). 3) Each insurance company {403(b) accounts} and investment company/custodian {403(b)(7) accounts} must be approved by the district/parish and/or state law (where applicable) before payroll reductions will begin. 4) The forms necessary for new enrollments, increases/decreases, changing carriers or stopping contributions must be submitted to the Third Party Administrator. All forms must be properly completed and signed by the participant and the soliciting representative. The Third Party Administrator will reject any incomplete form or any form not completed properly and the soliciting representative will be promptly notified. It will be the responsibility of the soliciting representative to contact the employee and, in most cases, the employee s enrollment or change will be delayed until the following enrollment period. 5) All paperwork will be processed according to the date received. 6) All 403(b) and 403(b)(7) account contributions will be made through the Third Party Administrator as the agent of the School District. CIRCLE THE STATE(S) IN WHICH YOU ARE LICENSED LIST SPECIFIC CARRIER(S) THAT YOU REPRESENT ARIZONA CALIFORNIA OREGON TEXAS LOUISIANA NORTH CAROLINA If you do not want your name to appear on the agent s list, please check this box ACCEPTANCE: I have read and agree to be bound by the rules and regulations of the School District concerning 403(b)and 403(b)(7) account solicitation and processing. PLEASE TYPE OR WRITE LEGIBLY. SIGNATURE DATE PRINT NAME ` ADDRESS MAILING ADDRESS CITY STATE ZIP CODE TELEPHONE NUMBER / EXTENSION FAX NUMBER CELL PHONE NUMBER TYPES OF LICENSE(S) LICENSE(S) NUMBERS (IF APPLICABLE) *TO OBTAIN FORMS, PLEASE VISIT OUR WEBSITE AT FIRST FINANCIAL ADMINISTRATORS PHONE NUMBER: OR P O BOX FAX NUMBER: HOUSTON, TX FFA SDRS 2005

4 Texas 403(b) & 403(b)(7) Grandfathered Accounts Form In accordance with 34 TAC Section 53.2(c) which states: A company that entered into a contract with an employee before June 1, 2002, is not subject to the certification requirements established by this chapter with respect to that contract, but the company is subject to the certification requirements established by this chapter with respect to any contracts or qualified investment products offered to, or entered into with, an employee on or after June 1, 2002 ; and Section 53.2 (d) which states If a company has entered into a contract with an employee before June 1, 2002, the company or employee may demonstrate in a manner acceptable to an educational institution that the provisions of this chapter do not apply to the contract in order for the company to receive contributions to, or payments for purchase of, the qualified investment product described in the contract through a salary reduction agreement between the educational institution and the employee. By signing below, I testify that the company named on the attached Salary Reduction Agreement was established prior to June 1, School District Participant s Name (Print) Participant s Signature Social Security Number Grandfathered Company Name Representative s Name (Print) Representative s Signature Date Please note: If the company requires a new application, the company is not considered grandfathered.

5 Questions 403(b) 457(b) Tax Deferment? Who can Participate? Age 50+ Catch-up Provisions Contributions are made Pre-tax and are deferred until a distribution is made. 403(b) arrangements may be maintained by organizations that are exempt from tax under Code Section 501(c)(3) and by public educational organizations. Tax exempt 501(c)(3) organizations are nonprofit organizations that are organized and operated exclusively for religious, charitable, scientific, literary, educational, or safety testing purposes. Any participant who has attained age 50 by the last day of the plan year is eligible to use the age 50+ catch up provision. The maximum catch-up contribution is the lesser of: 1) an applicable dollar amount (see table below) or 2) the participant s compensation less any other elective deferrals for the year. $1000 in 2002 $2000 in 2003 $3000 in 2004 $4000 in 2005 $5000 in 2006 and after Contributions are made Pre-tax and are deferred until a distribution is made. Section 457 Internal Revenue Code applies to any plan maintained by a state or local government or a tax-exempt organization (other than a governmental unit). States, local organizations are eligible employers. Any participant who has attained age 50 by the last day of the plan year is eligible to use the age 50+ catch up provision. The maximum catch-up contribution is the lesser of: 1) an applicable dollar amount (see table below) or 2) the participant s compensation less any other elective deferrals for the year. $1000 in 2002 $2000 in 2003 $3000 in 2004 $4000 in 2005 $5000 in 2006 and after 15 Years of Service Catch-up Employee must work at least 15 years with the current employer Employee must not have deferred to any deferral program sponsored by his employer, an average of $5,000 or more each year of service Not applicable for 457s Questions 403(b) 457(b) Salary Reduction Limits The limit is the lesser of 100% of The limit is the lesser of 100% of compensation or compensation or $11000 in 2002 $12000 in 2003 $13000 in 2004 $14000 in 2005 $15000 in 2006 Indexed in $500 increments thereafter $11000 in 2002 $12000 in 2003 $13000 in 2004 $14000 in 2005 $15000 in 2006 Indexed in $500 increments thereafter Are contract employees allowed to participate? No Yes

6 What type of investments available? Are post-employment contributions allowed? *Annuity contract (fixed and variable) *Custodial agreement (mutual fund) Employee (elective) and employer (nonelective) contributions Are allowed up to 5 years after employment (employer contributions only) *Annuity contract *Custodial agreement *Trusts (governmental 457) Trust are not subject to creditors Employee (elective) and employer (nonelective) contributions Not permitted Are loans allowed? Yes if the vendor allows loans Available for 457 governmental plans only (the employer still sustains the right not to permit loans) Are rollovers allowed? Yes upon a qualifying event (if the employee is 59½ or separated from service) Yes = governmental 457 plans - upon a qualifying event (if the employee is 59½ or separated from service) No = non-governmental 457 plans Questions 403(b) 457(b) What events will allow a Participants may elect to make distributions distribution from the plan? from a 403(b) without a tax penalty when: Death Disability Distributions allow amounts to be paid: Calendar year of attainment of age 70 ½ Hardship Age 59 ½ Severance of employment Subject to terms of plan document/403(b) contract Severance from employment Unforeseeable emergency Death Plan termination Subject to terms of plan document Are in-service withdrawals and transfers allowed? Withdrawals may be allowed for hardship, typically deferrals only, not earnings. Definition of hardship is less stringent that unforeseeable emergency. If the plan is following safe harbor hardship withdrawal regulations, elective deferrals must be suspended for six months following the hardship withdrawal. Plan may permit in-service withdrawals for deferrals upon attainment of age 59 ½. In-service transfers are permitted from 403(b) plans to governmental defined- Withdrawals may be permitted for an unforeseeable emergency. Requirements for unforeseen emergency are more stringent than hardship distributions from 401(k) or 403(b) plans. In service withdrawal may also be permitted if total amount payable does not exceed $5,000, participant has not previously received an in-service withdrawal and no deferrals in the past two years. Participant may or may not be given the option to elect distribution.

7 benefit plans within the same state for the purchase of service credits. In-service transfers are permitted from 457 plans to governmental defined-benefit plan within the same state for the purchase of service credits. What is the employer contribution limit? 415 Limit - $40,000 or 100% of compensation (must be reduced by the employees contribution) No higher employer contributions limit there is only one limit for employee and employer contributions (ex: the cap for employee and employer contributions combined is $12,000 (for 2003) Please utilize this information as a guide. Consult with your tax advisor before implementing these new laws into any particular plan.