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Overview Bencor Special Pay Plan (DROP Participants)

Overview Bencor Special Pay Plan (DROP Participants). For Employees of the School District of Lee County. Introduction. BENCOR NATIONAL GOVERNMENT EMPLOYEES RETIREMENT PLAN™ (BENCOR Special Pay Plan) Offered by BENCOR, Inc.

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Overview Bencor Special Pay Plan (DROP Participants)

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  1. OverviewBencor Special Pay Plan (DROP Participants) For Employees of the School District of Lee County

  2. Introduction • BENCOR NATIONAL GOVERNMENT EMPLOYEES RETIREMENT PLAN™ (BENCOR Special Pay Plan) • Offered by BENCOR, Inc. • Allows governmental entities and their employees to take maximum advantage of the Federal tax laws.

  3. Eligibility • Must be administrative, supervisory-technical, confidential, or instructional employee. • Must be eligible for accumulated sick leave pay and/or annual leave pay from the School District of Lee County. • Must be retiring, terminating or enrolled in DROP. • Must have accumulated sick and annual leave equal to $1,000.00 or more.

  4. Eligibility • Accumulated sick leave pay and annual leave pay of employees who retire, terminate employment, or enter into the DROP program will be placed into the BENCOR “Special Pay Plan” subject to contribution limits.

  5. Contribution Limits for DROP Employees • In the Plan Year before entering DROP and in the final year of DROP, the Maximum Plan Contribution cannot exceed 50% of the Plan Year Compensation* or $46,000, whichever is less *Plan Year Compensation= Wages for the previous 12 months + Accumulated Sick Leave Pay + eligible Accumulated Annual Leave Pay (“Special Pay”) that is to be paid in that year.

  6. Contribution Limits for DROP Employees • For all other DROP years, the Maximum Plan Contribution cannot exceed 100% of Plan Year Salary* or $46,000; whichever is less. * Plan Year Salary= Wages for the previous 12 months without accumulated sick leave/annual leave pay.

  7. Contribution Limits for DROP Employees • The Maximum Plan Contribution limit is calculated each year.

  8. Plan Trustee U.S. Bank

  9. Plan Sponsors • Diversified/Transamerica • BENCOR, Inc.

  10. Plan Administrator • BENCOR Administrative Services • Toll free number: 1-888-258-3422

  11. Investments • Diversified/Transamerica offers 17 investment options. • Special Pay Plan contributions are automatically placed in a fixed account (Guaranteed Pooled Fund) and can only be invested in other accounts in accordance with the participants’ instructions.

  12. Investment Expenses • No fee is charged for contributions that remain in the Guaranteed Pooled Fund (i.e. fixed or guaranteed) option.

  13. Distributions • Distributions may be taken upon: 1) Termination of employment 2) Total disability 3) Death

  14. Distributions • The participant may choose to leave money in the Plan, self-directing future investments and taking distributions as desired in a tax-deferred manner. • Distributions may be taken in a lump sum or as periodic payments taken monthly, quarterly, semi-annually, or annually.

  15. Distributions • To receive a distribution, the participant must complete a DISTRIBUTION/LOAN REQUEST FORM. A distribution packet is available from BENCOR Administrative Services at 1-888-258-3422. • Distributions will be processed in a timely manner with minimal waiting (once BENCOR receives the money from the District AND the distribution request form has been submitted).

  16. Distributions • DROP participants are not permitted to take distributions until termination. • Loan provisions are available to DROP Plan participants. For loan information, contact BENCOR Administrative Services at 1-888-258-3422.

  17. Distributions • DROP participants (or beneficiaries) can “roll over” Plan assets into an IRA or other qualified plan after termination of employment from the School District of Lee County. • DROP participants may also roll over DROP dollars into BENCOR at termination of employment.

  18. IRS Penalties • There is no IRS penalty for any Plan participant age 55 or older who elects to withdraw plan funds provided the participant separated from serviceduring the calendaryear in which he/she turned age 55, or later.

  19. IRS Penalties • Plan participants who separate employment before the calendar year in which they turn age 55 and who elect to withdraw Plan funds prior to age 59 ½ are subject to a 10% early withdrawal penalty by the IRS.

  20. IRS Penalties • The School District will “make whole” (subject to applicable withholding tax) DROP Plan participants who are subject to this penalty if they request all of their funds from the Plan Administrator within 60 days of retirement/termination of employment with the School District of Lee County; or 60 days of notification.

  21. Special Considerations-DROP Participants • Annual Leave (Vacation) • Accumulated Sick Leave

  22. Annual Leave Options • Employees participating in DROP have the option: (1) Receive their Annual Leave (vacation) as a lump sum distribution at the time of enrollment in DROP; or (2) Receive a lump sum payment at the end of the DROP period.

  23. Annual Leave Options • Any eligible annual leave (vacation) in excess of Plan contribution limits will be paid to the participant subject to Federal withholding and related payroll taxes (Social Security and Medicare). • The plan participant will not have access to plan contributions until the end of the DROP period, other than through the plan’s loan provisions.

  24. Accumulated Sick Leave • Employees participating in DROP will have their accumulated sick leave pay (less a 30-day Sick Leave Holdback) deposited into their Plan account as described in the table below.

  25. Accumulated Sick Leave Table*

  26. Excess Accumulated Sick Leave • If the annual sick pay contribution, as calculated above, exceeds the Maximum Plan Contribution limit, the excess amount will remain in the employee’s sick leave balance.

  27. Accumulated Sick Leave Contribution (Final DROP Year) • In the year of termination, employees will have 100% of their eligible sick leave balance paid into the Plan, subject to Maximum Plan Contribution limits. • Any excess amount will be paid directly to the employee by the District, subject to all applicable taxes.

  28. Employee Responsibilities 1) Complete BENCOR/Diversified/Transamerica enrollment form * a. Select account(s) (if not previously selected) b. Identify beneficiaries 2) Forward completed form to BENCOR 3) Retain packet and all pertinent information *Note: If no selection is made, eligible dollars will be paid into the Guaranteed Pooled Fund (fixed).

  29. End Part I

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