Program Benefits

 

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Managing Your Account

457 Plan Highlights & Program Overview
Welcome to Montgomery County Union's Retirement Plan Whether you are considering enrolling in the plan or currently are a participant, it's worthwhile to invest a few minutes learning about the fundamentals of Montgomery County Union's Plan. More detailed information about the plan is available by contacting your MassMutual Representative

What is a 457 Deferred Compensation Plan*?[Return to Top]
A 457 plan, also known as a Deferred Compensation Plan (DCP), is a retirement plan adopted in accordance with Section 457 of the Internal Revenue Code to allow you to voluntarily save for retirement with pre-tax dollars. 457 plans generally are funded solely with employee salary deduction contributions.

*There are different kinds of plans under 457, but this discussion is specific to 457(b).


457 Benefits
457 plans offer the following benefits:
  • Pre-tax contributions through salary reduction
  • Tax deferred earnings
  • Participant-directed investments

Distributions and certain deemed distributions may be subject to ordinary income tax.

What type of plan is available to me?[Return to Top]
Montgomery County Union offers a 457 Deferred Compensation Plan.

Who can participate?[Return to Top]
Any full time natural person employed by the Employer as a common law employee who receives Compensation and is a member of the bargaining units represented by the Fraternal Order of Police (Lodge 35), Municipal and County Government Employees Organization (MCGEO) or the International Association of Fire Fighters (IAFF). Notwithstanding the preceding, any employee represented by MCGEO hired before March 1, 2005 who had an account balance under the Deferred Compensation Plan of Montgomery County, Maryland (the “County Plan”) as of that date and did not elect to transfer his or her account into the Plan is not eligible to participate. Any employee represented by MCGEO hired before March 1, 2005 who did not have an account balance under the County Plan as of that date is not eligible to participate in the Plan if he makes an election to participate in the County Plan.

When can I enroll?[Return to Top]
If you are eligible, you may enroll in the 457 plan at any time.

How do I contribute to the 457 plan?[Return to Top]
Through the convenience of payroll deductions, you can make pre-tax contributions up to the lesser of $17,500 for 2013 or 100% of eligible compensation. Your pre-tax contributions - and any earnings - will accumulate tax deferred until withdrawn (generally at retirement), at which time withdrawals will be taxed as ordinary income.

Does the plan allow rollover contributions?[Return to Top]
Yes. If you have an existing 457 deferred compensation plan account from a previous employer, you may transfer ("rollover") that account into the county's 457 plan at any time.

Does participating reduce my Social Security benefits?[Return to Top]
No. Your contributions to, or withdrawals from, the plan will not reduce your Social Security benefits.

What's the impact to my taxes?[Return to Top]
Your taxable income for federal income tax purposes is reduced by the amount you contribute. For example, if your annual salary is $24,000 and you contribute $2,000 to the plan, your taxable income is shown as $22,000 on your W-2 form. These adjustments are made automatically through Montgomery County Union's payroll system.

Can I stop my contributions and restart later?[Return to Top]
You may start, stop, increase or decrease your contributions at any time. You may stop contributing at any time, and start again at a later date. This enables you to contribute at a pace that fits your budget.

What is the "Catch-Up" provision?[Return to Top]
Special "catch-up" rules may allow you to defer more than the normal maximum contributions. They are as follows:

Pre-Retirement Catch-Up - The pre-retirement catch-up period runs for the three consecutive taxable years ending with the year before the year in which you reach your plan's normal retirement age. Eligible contribution amounts will depend on participant contributions in previous years.

Age 50+ Catch-Up - may allow for individuals age 50 and older to contribute an additional $5,500 deferral to the plan in 2013. Please note that the Age 50+ Catch-Up provision is not available for any year in which the Pre-Retirement Catch-Up provision is utilized.

To determine if you are eligible for either Catch-Up provision, contact your MassMutual Representative.

What are my investment options?[Return to Top]
Your program offers investment options that are professionally managed by well-known money managers and span the risk/return spectrum. So whether you’re a very aggressive investor, very conservative or somewhere in between, our program offers a variety of investment options designed to suite your risk tolerance and timeline to retirement.

Your program, available through a group variable annuity contract, offers a wide variety of investment options to meet your needs, including a Stable Value option. You can direct your contributions into one or more of the available investment options. Go to the Investment Options section of this site to learn more.

Are there charges for transfers between investment options?[Return to Top]
There are no additional charges for transfers between investment options.

Are there any transfer restrictions?[Return to Top]
You have the flexibility to transfer amounts from one investment option to another (subject to any plan or regulatory limits).

In what form must I submit transfers between investment options? [Return to Top]
You are allowed to submit a total of 20 investment option transfer requests each calendar year for your participant account by any permitted means. Once these 20 transfers have been requested, you may submit any additional transfer requests only in writing by U.S. Mail.

Transfers as a result of dollar cost averaging and automatic rebalancing programs do not count toward the 20 transfer limit. Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

Each calendar year, we reset your transfers to allow 20 new sub-account transfers by all approved methods.

Please visit retirement.massmutual.com/rsgovnp-participant for more information. Once you access your account, from the Reference menu, select the Tools option. The complete transfer policy can be found within the Education/Reference section.

Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Because dollar cost averaging involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.

MassMutual reserves the right to limit the number of investment option transfers within a participant’s account.

What is dollar cost averaging and how can I use it?[Return to Top]
“Dollar cost averaging” is a term used for systematic investing – in other words, you invest a specified dollar amount at regular intervals, regardless of fluctuating price levels in the market.

There are two ways you can put dollar cost averaging to work for you:
  1. When you regularly contribute to your employer’s retirement plan (for example, through automatic payroll deduction).
  2. When you want to transfer money from one investment to another on a systematic basis.

How you may benefit from regularly contributing to your employer’s retirement plan: Because you contribute a certain percentage of your pay each pay period, you systematically invest your contributions throughout various market cycles – thus purchasing more units at lower prices during market downturns, and purchasing fewer units at higher prices during market upswings. Dollar cost averaging involves continuous investing – regardless of fluctuating price levels – so you should consider your financial ability to continue purchasing units during periods of low prices. While dollar cost averaging does not assure a profit or protect against loss in a declining market environment, it can be a sound investment strategy.

How to transfer money from one investment option to another using dollar cost averaging: Your employer-sponsored retirement program provides for dollar cost averaging directly from your account. The dollar cost averaging program is available to participants in government retirement programs – you may transfer assets from either the General (Declared Rate) Account or the Hartford Money Market HLS investment option at set intervals. You decide if these intervals are monthly, quarterly, semi-annually, or annually.

To learn more, please be sure to read our article on dollar cost averaging.

What is a Self Directed Brokerage Account (SDBA)?[Return to Top]
The Self Directed Brokerage Account is a separate investment vehicle offered in tandem with your retirement program. The eligibility requirements are:

  • $5,000 minimum MassMutual 457 plan balance
  • $2,500 minimum initial transfer to SDBA
  • $1,000 ongoing transfers
  • 50% maximum transferable amount
  • $1,000 minimum Hartford core account balance
Your program charges an SDBA maintenance fee (subject to change) of $50 ($12.50 per calendar quarter) which is deducted directly from your Core Accounts on a pro-rata basis. Please call the MassMutual directly at 1-800-528-9009 for your Montgomery County Union 457 Plan Specific SDBA FastFacts for more details.

What happens to my account upon my death?[Return to Top]
If you die prior to age 62 and have not commenced annuity payments, your designated beneficiary or beneficiaries will receive the current value of your account as of the date your program receives satisfactory written proof of your date of death and claim for payment in good order.

In the event that you die on or after age 62 and prior to your annuity commencement date, your designated beneficiary or beneficiaries will receive the current value of your account as of the date your program receives satisfactory written proof of your date of death and claim for payment in good order.

Are there fees associated with the investment options available under the Program?[Return to Top]
There are costs associated with the underlying investment options offered under the Program. For a complete listing of these fees and charges, please refer to the Performance and Fee Schedule in the Investment Options Section of this site.

When and how can I access my account assets?[Return to Top]
Your 457 account assets generally may be withdrawn from your 457 plan under the following qualifying circumstances:
  • Attainment of age 70½
  • Retirement
  • Separation from service
  • Unforeseeable emergency withdrawal
  • Death of participant
You must begin minimum distributions no later than April 1st of the calendar year following the year in which you attain the age of 70 ½ or, if later, the year in which you retire.

Ordinary income taxes will apply to each withdrawal. The IRS does NOT impose a 10% penalty tax on withdrawals made prior to age 59 ½ from a 457 Deferred Compensation Plan (please note: a 10% penalty may apply if the account has received rollovers from different plan types). Unforeseeable Emergency Withdrawals are subject to the authorization of your employer, Montgomery County Union.

Are there any withdrawal/surrender charges?[Return to Top]
There are no withdrawal or surrender charges.

What if I terminate employment prior to retirement?[Return to Top]
Upon termination from employment, you currently have several options. You may choose to leave your account assets at MassMutual where they will retain their tax-deferred status and continue to remain invested in the investment options you selected. You may request a distribution and either liquidate your account (certain restrictions may apply) or you may transfer your account assets into another eligible retirement plan including a traditional Individual Retirement Account (IRA), 401 plan, 403(b) plan or governmental 457 plan. For more information, please speak to your MassMutual Representative.

What is an unforeseeable emergency?[Return to Top]
Under Internal Revenue Code Section 457, an unforeseeable emergency is a severe financial hardship to the participant, resulting from a sudden and unexpected illness or accident of the participant or of a dependent of the participant. Foreseeable expenses such as transportation, education or the purchase of a new home are not considered unforeseeable emergencies. Your MassMutual Representative can provide you with information regarding the Montgomery County Union procedure for requesting an unforeseeable emergency withdrawal.

What are my payout options under the 457 plan?[Return to Top]
Upon retirement or termination of employment you may select from a number of payout options. You may elect to receive a lump sum distribution. You may also elect a distribution plan under installment payments (systematic withdrawals). Installment payments provide you flexibility in selecting the payment amount, timeframe and investment options. By choosing to take a distribution using an installment payment method, your account balances will continue to participate in the performance of the variable investment options. Finally, you may select from several lifetime annuity payout options. For details, call (800) 243-1422 and speak to a Payout Options Representative.

How do I enroll?[Return to Top]
To enroll, contact your MassMutual Representative.

Why should I change to MassMutual?[Return to Top]
We will provide you with the tools and services that can help enable and empower you to manage your financial future with confidence. We have a strong history of experience in the retirement plan industry and are committed to helping retirement dreams come true - one investor at a time.

How can I manage my 457 account?[Return to Top]
Your way! MassMutual is here when and how you need us - to offer as much or as little assistance as you want. Our goal is to make managing your financial future as convenient and comfortable as possible.

Do you provide access to online retirement planning services?[Return to Top]
Accessed through our interactive website, retirement.massmutual.com/rsgovnp-participant, MassMutual makes available Morningstar® Online, an Internet-based retirement planning and guidance service providing asset allocation recommendations. This feature integrates investment research, education, asset allocation guidance and many other unique features to give you a comprehensive, web-based approach to investing for retirement from an independent source - Morningstar Associates, LLC. Log on to our website today to experience this exciting feature

If you are not enrolled in the plan yet and would like to learn more about this service, please read "Get Investment Guidance. Retire on Target," for more information.

Will I receive regular statements?[Return to Top]
You will receive a comprehensive 457 Statement of Account each quarter.

The statement will show your account balance at the beginning of the period, any activity in the account during the period, the amount of any earnings, account balance at the end of the period, contributions, historical investment option performance and more.

Included with your Statement of Account is an informative newsletter, written expressly for retirement investors like you.

Who can I talk to about my account?[Return to Top]
Your local MassMutual Representative is a knowledgeable and valuable resource. He or she can provide you with information to help you make intelligent, informed decisions about your retirement planning strategy. Whether you choose to meet one-on-one for a personal consultation, or attend a variety of educational group meetings at your work site, you can feel confident that you'll receive personal, professional service. See "Getting Started" to learn more.

Do I have toll free account access?[Return to Top]
Yes. In addition to your local representative, you can call 1-800-528-9009 for prompt, professional service. Manage your financial future toll-free by calling The MassMutual's Account Access Line. You may speak with a Customer Service Associate or utilize the automated voice or touch-tone system for a variety of account inquiries and financial transactions, including:
  • Transferring assets between investment options
  • Changing the allocation of investment elections
  • Obtaining information about investment options, including historical performance
Can I reach you on the web?[Return to Top]
Absolutely. Log on to MassMutual's interactive web site, at retirement.massmutual.com/rsgovnp-participant. This secure site allows you to view your personal account, make a variety of inquiries and financial transactions, and obtain educational information. Log on today to learn more.

MassMutual is committed to helping you reach your retirement objectives with knowledge and confidence.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

Many tax planning strategies emphasize the deferral of current income taxes, on the basis that your federal income tax rate may be lower at retirement. Please keep in mind that federal income tax rates are unpredictable and may be higher when you take a distribution than at the time of deferral. Other factors, including state tax rates and your income, may also affect your overall tax rate upon distribution. Please consult with your tax advisor for individual tax planning strategy and advice. MassMutual does not predict or in any way guarantee favorable tax results.

Retirement programs can be funded by group fixed or variable annuity products & funding agreements issued by Hartford Life Insurance Company (Simsbury, CT).

Effective January 1, 2013, Massachusetts Mutual Life Insurance Company ("MassMutual") acquired The Hartford’s Retirement Plans Group ("RPG"). In connection with the transaction, MassMutual has no affiliation, and the RPG business no longer has any affiliation, with The Hartford Financial Services Group or any of its subsidiaries. MassMutual has been appointed by Hartford Life Insurance Company (“HLIC”) to provide all administrative services necessary to support the insurance contracts issued by HLIC in connection with the RPG business.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries.

MassMutual Financial Group is the fleet name for Massachusetts Mutual Life Insurance Company (MassMutual) [of which Retirement Services is a division] and its affiliated companies and sales representatives.