“Unforeseeable Emergency” Withdrawals
The State of Maine Deferred Compensation Plan is designed to provide you with a convenient way to save for retirement while also offering immediate tax-savings. Because the Plan allows you to save on a pre-tax basis, the withdrawals you may make while you are working for the State are limited by law. However, the law recognizes that you may need to alter your course due to an unforeseeable emergency. In such cases, you may be able to withdraw all or a portion of your savings from the Plan.
What is considered an “unforeseeable emergency”?
The IRS regulates what types of events can be considered an unforeseeable emergency. Some examples include:
- Preventing the imminent foreclosure of or eviction from your primary residence.
- Expenses resulting from the loss of your property due to a casualty event
(including the need to rebuild,) not otherwise covered by insurance.
- Home repairs not covered by insurance (i.e., those that constitute or arise from an unforeseeable emergency).
- Expenses associated with a funeral for your spouse or dependent.
- Expenses associated with a sudden and unexpected illness (or accident) to you, your spouse or your dependent.
- Medical expenses not covered by insurance, including the cost of nonprescription drugs.
- Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control.
If you have an unforeseeable emergency, you may apply for a withdrawal only if your hardship cannot be satisfied through any other means.
You must submit evidence of the financial hardship, as required by the Plan
Administrator. Each application will be considered on an individual basis and
reviewed based on the facts and circumstances. To request a withdrawal application
for an unforeseeable emergency, please contact your local Plan Representative
with your financial services organization.
An unforeseeable emergency does not include circumstances that can be planned for, such as purchasing a home or car, education expenses, or payment of taxes. However, if you withdraw amounts from the Plan due to an unforeseeable emergency, you may also withdraw an additional amount necessary to cover the taxes on the withdrawal amount.
What are some of the drawbacks to taking a withdrawal?
The amount of your unforeseeable emergency withdrawal will be subject to ordinary income tax and possibly an IRS early withdrawal penalty of 10% (for participants under age 59½.). In addition, the amount you withdraw (plus any investment earnings lost as a result of the withdrawal) will no longer be available to you when you retire.
The best way to deal with unforeseeable hardships is by planning for a financial emergency. This may include setting up an emergency fund outside of the Plan to be used for some of the situations outlined above. One strategy is to set aside anywhere from three to six months of living expenses in a conservative investment account. Long-term financial health doesn’t just happen; it requires some discipline and prudent planning. Speak with your financial services organization or another financial advisor for additional assistance.
What to Do with a “Frozen” Investment Option
With the chilly temperatures outside, now is probably a good time to talk
about the “frozen” investment options within the investment
lineups offered by the Plan’s three financial services organizations
(FSOs). A “frozen” investment
option no longer accepts new contributions through the Plan. Any existing
balances in a frozen investment option will remain invested in that
option until you elect to transfer the amount to another investment
option.
How does an investment option become “frozen”?
The investment options in the Plan are regularly reviewed by the Plan’s Advisory Council with the assistance of professional asset advisors. From time to time you may see new investment options being added and some investment options being replaced due to a variety of reasons. For example, if one investment option is not performing as well as desired, it may be replaced with an investment option that has similar investment objectives but better performance. When an investment option is replaced, any money you have invested in that option may remain in that option, if you choose, but any new contributions will automatically be redirected to a designated replacement investment option. The investment option being replaced is considered “frozen” because no new contributions or investment transfers can move into that investment option. You can transfer all or a portion of your balance out of a frozen investment option at any time. However, once you move money out of a frozen investment option, you can’t move it back again. As long as your money continues to be invested in the frozen investment option, your balance will continue to reflect any dividends and/or capital gains distributions attributable to the frozen option, as well as any market losses or gains due to the portfolio’s holdings.
How do I know if I am invested in a “frozen” investment option?
To determine if you are invested in a frozen investment option, compare your
quarterly statement from your FSO to the list of investment options outlined
in this newsletter. If you can’t find your investment option listed within
the available investment options for your FSO, it may indicate that you are
holding one of the frozen investment options. These frozen investment options
are not monitored by the Plan’s Advisory Council like the current active investment
options.
If you are invested in a frozen investment option, you may want to evaluate
your investment strategy and determine what, if any, action you should take.
Please contact your FSO or other financial advisor with any questions or for
more information on a frozen investment option. There is no guarantee
that a replacement investment option or another investment option will outperform
a frozen investment option. It is important to note that the Plan, along
with State of Maine personnel, cannot provide investment advice and the fact
that an investment option is replaced should not be interpreted as the Plan
recommending one investment option over another. You should consult with your
FSO or other financial advisor to help you determine which investment options
are best suited for your needs.
Investment Fund Details
IMPORTANT NOTE: The information presented here is
not intended as investment advice. Its purpose is to help you understand
the investment options available through the State of Maine Deferred
Compensation Plan. Your financial strategy and investment choices are
entirely your own and should reflect your personal needs and circumstances.
State of Maine personnel, by federal law, cannot provide investment
advice. For more information, you may want to consult with a professional
financial advisor. The investment information shown is current as of
December 31, 2007. For more up-to-date investment results, please
contact your financial services organization.
Results are historical and not intended to portray future performance. Current performance may be less than figures shown. Investment benchmarks (shown in italic) may differ from the benchmarks provided in the funds’ prospectuses.
Please note that Fixed Accounts (noted with an “*” in
the “Rates of Return” column) provide a specified rate
of return. For current rates, along with an explanation of how they
are determined, contact your financial services organization.
 THE
HARTFORD |
|
|
| Return on Investments (net of expenses) |
Operating Expenses |
| Rates of Return as of December 31, 2007 |
| Level of Risk |
Investment Options |
Quarter to Date |
Year to Date |
Annualized |
Management Fees |
Other Expenses*** |
Total Expenses |
| 3 Years |
5 Years |
| Low |
Hartford Life Fixed Account |
Current Interest Rate for 4Q is 4.0%* |
— |
— |
— |
| Hartford Total Return Bond HLS |
1.48% |
4.20% |
3.50% |
4.39% |
0.50% |
0.45% |
0.95% |
| Lehman Aggregate Bond Index |
3.00 |
6.97 |
4.56 |
4.42 |
|
|
|
| SSgA Interm Bond Index |
2.80 |
7.01 |
3.95 |
3.65 |
0.40 |
0.00 |
0.40 |
| Lehman Interm Gov/Credit Index |
2.90 |
7.39 |
4.32 |
4.06 |
|
|
|
| Medium |
Oakmark Equity Income I |
0.92 |
11.30 |
9.79 |
12.20 |
0.86 |
0.60 |
1.46 |
| Janus Balanced |
0.27 |
9.50 |
8.83 |
9.51 |
0.82 |
0.60 |
1.42 |
| 60%/40% S&P 500/ LB Agg |
-0.80 |
6.22 |
7.07 |
9.51 |
|
|
|
| Hartford Dividend & Growth HLS |
-3.12 |
7.61 |
10.68 |
13.82 |
0.67 |
0.60 |
1.27 |
| Russell 1000 Value Index |
-5.80 |
-0.17 |
9.32 |
14.63 |
|
|
|
| High |
SSgA S&P 500 Index |
-3.42 |
5.16 |
8.27 |
12.47 |
0.35 |
0.00 |
0.35 |
| Hartford Capital Appreciation HLS |
-1.05 |
16.13 |
15.63 |
21.02 |
0.67 |
0.60 |
1.27 |
| Neuberger Berman Socially Responsive Tr |
-2.19 |
6.67 |
8.96 |
14.21 |
1.13 |
0.60 |
1.73 |
| S&P 500 Index |
-3.33 |
5.49 |
8.62 |
12.83 |
|
|
|
| SSgA US Total Market Index |
-3.39 |
5.18 |
8.65 |
13.69 |
0.40 |
0.00 |
0.40 |
| Wilshire 5000 Index |
-3.22 |
5.62 |
9.16 |
14.01 |
|
|
|
| American Fds Growth Fund of America |
-2.92 |
9.93 |
11.01 |
14.83 |
0.96 |
0.60 |
1.56 |
| Russell 1000 Growth Index |
-0.77 |
11.81 |
8.68 |
12.11 |
|
|
|
| Lord Abbett Mid Cap Value |
-6.26 |
-0.17 |
6.15 |
12.84 |
1.20 |
0.60 |
1.80 |
| Russell Mid Cap Value Index |
-5.97 |
-1.42 |
10.11 |
17.92 |
|
|
|
| SSgA S&P Mid Cap Index |
-2.80 |
7.60 |
9.89 |
16.04 |
0.40 |
0.00 |
0.40 |
| S&P 400 Index |
-2.73 |
7.98 |
10.27 |
16.20 |
|
|
|
| Hartford Mid Cap HLS |
-2.23 |
14.61 |
13.90 |
18.54 |
0.68 |
0.60 |
1.28 |
| Russell Mid Cap Growth Index |
-1.70 |
11.43 |
11.39 |
17.90 |
|
|
|
| Nuveen NWQ Small Cap Value ** |
-4.52 |
-4.14 |
7.91 |
N/A |
1.49 |
0.60 |
2.09 |
| Russell 2000 Value Index |
-7.28 |
-9.78 |
5.27 |
N/A |
|
|
|
| SSgA Russell 2000 Index |
-4.71 |
-1.95 |
6.35 |
15.80 |
0.40 |
0.00 |
0.40 |
| Russell 2000 Index |
-4.58 |
-1.57 |
6.80 |
16.25 |
|
|
|
| Royce Value Plus ** |
-6.84 |
2.62 |
11.06 |
25.56 |
1.40 |
0.60 |
2.00 |
| Russell 2000 Growth Index |
-2.10 |
7.05 |
8.11 |
16.50 |
|
|
|
| MFS Int’l New Discovery A |
-3.73 |
8.22 |
17.70 |
24.36 |
1.50 |
0.60 |
2.10 |
| SSgA EAFE Index |
-1.80 |
10.89 |
16.42 |
N/A |
0.50 |
0.00 |
0.50 |
| MSCI-EAFE Index |
-1.75 |
11.18 |
16.84 |
21.59 |
|
|
|
| Franklin Mutual Discovery A |
-0.88 |
10.30 |
15.62 |
18.96 |
1.36 |
0.60 |
1.96 |
| MSCI-World Index |
-2.33 |
9.57 |
13.30 |
17.53 |
|
|
|
** New Funds as of 9/28/07
*** Effective February 15, 2008, the 0.60% program and administrative expense charge will be eliminated from all actively managed investment options.
| ING FINANCIAL ADVISERS, LLC |
|
|
| Return on Investments (net of expenses) |
Operating Expenses |
| Rates of Return as of December 31, 2007 |
| Level of Risk |
Investment Options |
Quarter to Date |
Year to Date |
Annualized |
Management Fees |
Other Expenses |
Total Expenses |
| 3 Years |
5 Years |
| Low |
ING Fixed Account |
Current Interest Rate for 4Q
is 4.0%* |
— |
— |
— |
| ING Intermediate Bond |
2.16% |
5.71% |
4.09% |
4.56% |
0.49% |
0.30% |
0.79% |
| Vanguard Total Bond Market Index — Sig |
3.10 |
7.02 |
4.55 |
4.37 |
0.11 |
0.00 |
0.11 |
| Lehman Aggregate Bond Index |
3.00 |
6.97 |
4.56 |
4.42 |
|
|
|
| Medium |
ING Balanced |
-0.61 |
5.04 |
6.04 |
8.96 |
0.60 |
0.50 |
1.10 |
| Pax World Balanced |
0.26 |
8.89 |
7.95 |
10.62 |
0.97 |
0.50 |
1.47 |
| 60%/40% S&P 500/ LB Agg |
-0.80 |
6.22 |
7.07 |
9.51 |
|
|
|
| T. Rowe Price Value — Adv |
-6.13 |
0.06 |
7.95 |
13.26 |
1.02 |
0.50 |
1.52 |
| ING Van Kampen Comstock |
-6.32 |
-2.53 |
5.17 |
11.83 |
0.83 |
0.50 |
1.33 |
| Russell 1000 Value Index |
-5.80 |
-0.17 |
9.32 |
14.63 |
|
|
|
| High |
Fidelity VIP ContraFund |
0.71 |
17.00 |
14.81 |
17.32 |
0.66 |
0.50 |
1.16 |
| ING Stock Index |
-3.36 |
5.28 |
8.35 |
N/A |
0.27 |
0.00 |
0.27 |
| S&P 500 Index |
-3.33 |
5.49 |
8.62 |
12.83 |
|
|
|
| Vanguard Total Stock Market Index — Sig |
-3.32 |
5.55 |
8.94 |
13.82 |
0.09 |
0.00 |
0.09 |
| MSCI US Broad Market Index |
-3.31 |
5.59 |
9.08 |
13.96 |
|
|
|
| ING T. Rowe Price Growth Equity |
-2.04 |
9.36 |
9.21 |
13.18 |
0.74 |
0.50 |
1.24 |
| Russell 1000 Growth Index |
-0.77 |
11.81 |
8.68 |
12.11 |
|
|
|
| ING Index + Mid Cap |
-3.24 |
4.97 |
8.12 |
14.08 |
0.49 |
0.50 |
0.99 |
| S&P 400 Index |
-2.73 |
7.98 |
10.27 |
16.20 |
|
|
|
| ING T. Rowe Price Diversified Mid Cap Growth |
-1.78 |
12.82 |
9.97 |
15.77 |
0.66 |
0.50 |
1.16 |
| Russell Mid Cap Growth Index |
-1.70 |
11.43 |
11.39 |
17.90 |
|
|
|
| ING Oppenheimer Main Street Sm Cap |
-5.48 |
-1.71 |
7.15 |
15.99 |
0.77 |
0.50 |
1.27 |
| Russell 2000 Index |
-4.58 |
-1.57 |
6.80 |
16.25 |
|
|
|
| ING Baron Small Cap Growth |
-2.69 |
5.83 |
9.22 |
17.24 |
1.08 |
0.50 |
1.58 |
| Russell 2000 Growth Index |
-2.10 |
7.05 |
8.11 |
16.50 |
|
|
|
| ING International Value |
-0.48 |
12.87 |
16.54 |
19.04 |
1.01 |
0.50 |
1.51 |
| MSCI-EAFE Index |
-1.75 |
11.18 |
16.84 |
21.59 |
|
|
|
| Oppenheimer Global Securities |
-4.54 |
6.03 |
12.04 |
16.51 |
0.66 |
0.50 |
1.16 |
| MSCI-World Index |
-2.33 |
9.57 |
13.30 |
17.53 |
|
|
|
| AIG RETIREMENT |
|
|
| Return on Investments (net of expenses) |
Operating Expenses |
| Rates of Return as of December 31, 2007 |
| Level of Risk |
Investment Options |
Quarter to Date |
Year to Date |
Annualized |
Management Fees |
Other Expenses |
Total Expenses |
| 3 Years |
5 Years |
| Low |
AIG Fixed-Interest Account |
Current Interest Rate for 4Q is 4.0%* |
— |
— |
— |
| Dreyfus Bond Index ** |
2.92% |
6.68% |
4.19% |
3.99% |
0.43% |
0.00% |
0.43% |
| PIMCO Total Return Bond A ** |
3.80 |
8.57 |
4.79 |
4.82 |
0.90 |
0.00 |
0.90 |
| Lehman Aggregate Bond Index |
3.00 |
6.97 |
4.56 |
4.42 |
|
|
|
| Medium |
Munder Asset Allocation Balanced A |
-0.91 |
8.20 |
7.95 |
11.04 |
1.56 |
0.00 |
1.56 |
| American Funds American Balanced A |
-1.97 |
6.32 |
6.78 |
10.07 |
0.59 |
0.00 |
0.59 |
| 60%/40% S&P 500/ LB Agg |
-0.80 |
6.22 |
7.07 |
9.51 |
|
|
|
| American Funds Investment Co. of America A |
-4.33 |
5.68 |
9.16 |
12.34 |
0.55 |
0.00 |
0.55 |
| MFS Value A
| -1.67 |
7.34 |
10.97 |
14.25 |
1.17 |
0.00 |
1.17 |
| Russell 1000 Value Index |
-5.80 |
-0.17 |
9.32 |
14.63 |
|
|
|
| High |
Pioneer A |
-4.69 |
4.44 |
8.71 |
12.13 |
1.11 |
0.00 |
1.11 |
| Dreyfus S&P 500 Index |
-3.43 |
4.75 |
7.78 |
11.93 |
0.50 |
0.00 |
0.50 |
| Calvert Social Inv. Equity |
-0.11 |
9.66 |
7.71 |
10.10 |
1.23 |
0.00 |
1.23 |
| S&P 500 Index |
-3.33 |
5.49 |
8.62 |
12.83 |
|
|
|
| Oppenheimer Capital Appreciation A |
-2.85 |
13.50 |
8.26 |
11.65 |
1.05 |
0.00 |
1.05 |
| Russell 1000 Growth Index |
-0.77 |
11.81 |
8.68 |
12.11 |
|
|
|
| Dreyfus Mid Cap Index ** |
-2.77 |
7.56 |
9.81 |
15.68 |
0.50 |
0.00 |
0.50 |
| S&P 400 Index |
-2.73 |
7.98 |
10.27 |
16.20 |
|
|
|
| Turner Mid Cap Growth |
1.79 |
24.13 |
13.81 |
19.43 |
1.18 |
0.00 |
1.18 |
| Russell Mid Cap Growth Index |
-1.70 |
11.43 |
11.39 |
17.90 |
|
|
|
| Neuberger Berman Genesis Trust |
4.51 |
21.41 |
14.58 |
18.46 |
1.37 |
0.00 |
1.37 |
| Russell 2000 Index |
-4.58 |
-1.57 |
6.80 |
16.25 |
|
|
|
| Dreyfus Small Cap Stock Index ** |
-6.50 |
-0.62 |
6.94 |
15.54 |
0.50 |
0.00 |
0.50 |
| S&P 600 Small Cap Index |
-6.45 |
-0.30 |
7.32 |
16.04 |
|
|
|
| American Funds Euro Pacific R3 |
1.24 |
18.28 |
19.87 |
21.96 |
1.11 |
0.00 |
1.11 |
| Dreyfus Int’l Stock Index ** |
-1.84 |
10.67 |
16.22 |
20.80 |
0.60
| 0.00
| 0.60
|
| MSCI-EAFE Index |
-1.75 |
11.18 |
16.84 |
21.59 |
|
|
|
| Oppenheimer Global A |
-4.67 |
5.69 |
11.94 |
18.77 |
1.05 |
0.00 |
1.05 |
| MSCI-World Index |
-2.33 |
9.57 |
13.30 |
17.53 |
|
|
|
** New Funds as of 10/30/07
Beginning with the 4th quarter of 2007, AIG waived the
administrative charges. Longer-term performance still reflects
the 0.35% administrative charge.
Important Changes to the Investment Lineup
AIG Retirement
(Effective January 1, 2008, the company’s name has changed from AIG VALIC to AIG Retirement.)
AIG Retirement has announced the following investment lineup changes:
- Effective October 30, 2007, AIG Retirement increased the interest rate on
the Fixed Interest Option to 4% and eliminated its 0.35% administrative fee.
The management fees and total expenses for each of the investment options offered
through the Plan are shown in the table above.
- The following five (5) investment options were added to your AIG Retirement
lineup effective October 30, 2007:
| Fund |
Symbol |
Dreyfus Intl Stock Index |
DIISX |
Dreyfus Small Cap Stock Index |
DISSX |
Dreyfus Mid Cap Index |
PESPX |
PIMCO Total Return A |
PTTAX |
Dreyfus Bond Index |
DBMIX |
- Effective October 30, 2007, the following three (3) investment options
were closed (“frozen”). Future contributions will be redirected
as follows:
Closed (“frozen”) Investment
Option |
|
Replacement Investment Option |
| Fund |
Symbol |
|
Fund |
Symbol |
Vanguard Intermediate Term Investment Grade Bond |
VFICX |
to |
PIMCO Total Return A |
PTTAX |
Vanguard Long-Term Bond Index |
VBLTX |
to |
Dreyfus Bond Index |
DBMIX |
T. Rowe Price Science and Tech |
PRSCX |
to |
Dreyfus S&P 500 Index |
PEOPX |
For more information, please contact AIG Retirement or refer to the letter dated October, 22, 2007, which detailed these investment option changes.
The Hartford
The Hartford has announced the following changes to the investment options effective February 15, 2008:
- The 0.60% Program and Administrative Expense charge will be eliminated on all of the actively managed investment options. The passively managed investment options (i.e., Index funds) had previously eliminated this expense. The management fees and total expenses for each of the investment options offered through the Plan are shown in the table above.
- The accounting method for the investment options is changing to “net asset value” (NAV) accounting. As a result, participants with the Hartford will see a change in how the investment options will appear on their quarterly statement. With NAV accounting and reporting, the unit/share price of each investment option is designed to reflect the underlying mutual fund share price.
For more information, please contact The Hartford or refer to the recent communication sent to current participants detailing these changes.
Advisory Council on Tax Deferred Arrangements
Commissioner, Department of Administrative & Financial
Services
Rebecca M. Wyke, Chair
Designee: Alicia Kellogg, Co-Chair
Director, Bureau of Human Resources
Contact info: alicia.kellogg@maine.gov
Superintendent of Insurance
Eric Cioppa
Designee: Stuart Turney
Insurance Examiner in Charge
Contact info: stuart.e.turney@maine.gov
Superintendent of Financial Institutions
Lloyd P. LaFountain, III
Designee: Robert B. Studley
Principal Bank Examiner
Contact info: robert.b.studley@maine.gov |
MSEA
Kathryn J. Latulippe, Administrative Unit
Contact info: 207-624-8441 or kathryn.j.latulippe@maine.gov
Steven Keaten, Professional-Technical Co-chair
Contact info: 287-9215 or steven.keaten@maine.gov
Vacant, Supervisory
Contact info:
Peter Grant, Operations & Maintenance (appointment pending)
Contact info: 624-3900 or peter.grant@maine.gov
MSLEA
Steven M. Couture, Law Enforcement
Contact info: steve.couture@maine.gov
AFSCME
Patrick Murphy
Contact info: pmurphy42@hotmail.com
Maine State Troopers
Michael T. Edes (appointment pending)
Contact info: michael.t.edes@maine.gov |
The Hartford
Augusta: 207-623-8421
Portland: 207-761-4733
In Maine: 1-800-640-8787
Outside Maine: 1-888-457-7824
www.retire.hartfordlife.com |
ING Financial Advisers, LLC
Augusta: 207-622-4882
In Maine: 1-866-826-8063
Outside Maine: 1-800-238-8458
www.ingretirementplans.com |
AIG Retirement
In Maine: 207-771-5378
1-800-892-5558, ext. 88631
Outside of Maine: 1-888-568-2542
www.AIGRetirement.com |
