To access
your pension account on the AIG-Valic website, click here:
http://www.aigvalic.com/ctc.
TABLE
OF CONTENTS FOR THIS
WEB PAGE:
Section 1:
QPP and SPP Plan Information
Section 2: Our New Account Administrator:
AIG-Valic
Section 3:
"HOW CAN I OBTAIN DISTRIBUTION OF MY PENSION FUNDS?"
(Information for Terminating and Retiring Pension
Members)
Section 4: Distribution Forms
Section 5: Address Changes
Section 6: Information for Our
Plan Members Over the Age of 70 1/2
Section 7: Message to Plan Members
about Plan Operating Expenses
Section 8: Beneficiary Forms
Section 9: Miscellaneous
Section 10: Frequently Asked Questions
("FAQ")
Section
1: QPP and SPP Plan Information
- Central Texas College maintains two IRS-qualified defined
contribution pension plans for its employees.
- The Employees’ Pension
Plan and Trust (referred to as “QPP”)
is for full-time employees (with some exceptions). Eligible
employees must satisfy a one-year waiting period for participation
in QPP, after which time they are entered into QPP on
the next entry date (either March 1 or September 1). Employees
contribute a mandatory 6% of their wages to QPP, and CTC
contributes a mandatory 7%. Employees may contribute an
additional 4% if they wish. Employees are always 100%
vested in their own employee contributions, but they must
satisfy a 6-year vesting schedule in order to become 100%
vested in the employer contributions.
- The Employees’ Supplemental
Plan and Trust (referred to as “SPP”)
is for part-time employees (with some exceptions). There
is no waiting period for SPP participation; eligible employees
participate from their first day of employment. Eligible
employees contribute a mandatory 3.75% of their wages
to SPP, and CTC contributes a mandatory 3.75%. Employees
are always 100% vested in both their own employee contributions,
and also the employer contributions.
- Special rules apply to our “wage-determined” employees.
Wage-determined employees are eligible to participate
in SPP, but not QPP. Some exceptions may apply, depending
on your individual circumstances.
- When individuals leave
CTC (and are officially and completely terminated/retired
from the employer), they can take distribution
of the vested balance in their pension account, which
consists of: employee contributions, vested employer contributions,
and vested accrued earnings. Plan rules mandate that inactive
accounts with balances under $5,000 should be distributed
as quickly as possible. If you are no longer an active
employee of the college, and your pension balance is under
$5,000, please contact us so that we can process your
distribution in the manner that you choose. If you do
not choose the manner of distribution, an involuntary
distribution may be made. If your account balance is over
$5,000, you may leave your funds in “QPP” and “SPP” after
you terminate/retire. You will continue to participate
in our portfolios, just as you did before you terminated/retired.
Once you reach the age of 70 ½, IRS rules require that
you begin taking annual minimum distributions.
- CTC pension plans operate in compliance with ERISA regulations,
and are audited every year by an outside independent audit
firm. The pension plans are monitored by a
Pension Plan Trust Committee, which is composed of active
employees from various CTC departments. The Trust
Committee meets at least four times per year, and all
meetings are open to plan members. If you would
like to attend a Trust Committee meeting, just call us
at 254-526-1416 for more information.
Section
2: Our New Account Administrator: AIG-Valic
In an effort to
improve our pension plans and provide more options to our
participants, CTC engaged a new pension account administrator,
AIG-Valic, on September 1, 2004. AIG-Valic is one of the
largest, most experienced pension administration providers
in the country, specializing in higher education clients.
QPP and SPP plan rules remain
the same, but many new options are now available to our
participants:
- Participants can now choose
their own investment options from a broad portfolio
(if they wish to do so).
- Accounts are adjusted to market
value on a daily basis.
- Participants have 24-hour access
to their accounts on the AIG-Valic website, where they
can print out a statement whenever they need one.
- AIG-Valic works with us to provide
our participants with investor education seminars and
materials, including asset allocation information, using
a variety of delivery methods.
All pension accounts are initially
invested in a “default” investment
allocation. The “default” is an allocation
selected by AIG-Valic and the CTC Employees’ Pension Plan
Trust Committee. The “default” was chosen because it was
considered to be a reasonable allocation for the average
participant, within the parameters of the Statement of Investment
Policy utilized by the Trust Committee, and because it correlates
very closely to investments chosen by the Trust Committee
prior to the rollover to AIG-Valic. This “default” will
be monitored on an ongoing basis by AIG-Valic’s investment
analysts, as well as the CTC Employees’ Pension Plan Trust
Committee, and may occasionally be adjusted, depending on
the recommendations of AIG-Valic’s investment professionals.
Participants who do not wish to choose
their own investments can simply remain in the “default”
allocation. Your quarterly statements will come to you in
the mail, as they always have (as long as you keep your
address updated).
Those individuals
who do wish to choose their own investments can choose
from a menu of funds. The QPP menu
contains 36 fund options, and the SPP menu contains 5
fund options (click on “QPP Default and Menu” or “SPP
Default and Menu” on the toolbar above for lists of funds).
Your individual account pages also list all the funds
available to you, with links to fund information.
To access your
pension account on the AIG-Valic website, click here:
http://www.aigvalic.com/ctc.
You will be taken
to a customized section of the AIG-Valic website that was
built just for us. In addition to accessing your own pension
account, you can find lots of helpful
information through this web page.
- For example, click on the tab entitled “Plan
Details”. Then click on “Full-Time Employees”,
where you will find lots of info on our Employees’ Pension
Plan and Trust (“QPP”). Click on “Part-Time Employees”
to find info on our Employees’ Supplemental Plan and Trust
(“SPP”). These pages will tell you about plan rules, contributing,
vesting, distributions, etc.
- Under the tab entitled “Education
and Planning”, you will find lots of investment
education information. Topics include: cash management,
education planning, investment strategies, investment
types, retirement planning, risk management, tax, and
a financial glossary.
- In order to access your own pension account, click on
“View Your Account”.
You will be asked to log in, using your Social Security
Number, and you will be asked to choose a “pin number”
(password).
INVESTOR
EDUCATION AND ALLOCATION ASSISTANCE
AIG-Valic has
created an excellent web site for Central Texas College
pension plan members. It contains unlimited amounts of
investor education, including online videos. Just
go to http://www.aigvalic.com/ctc and click on the tab
entitled "Education and Planning". Then follow
the links entitled "Cash Management", "Education
Planning", "Investment Strategies", "Investment
Types", "Retirement Planning", "Risk
Management", and "Tax Legislation".
We really like the way these links are written, because
they are easy to follow. There is also an excellent
Financial Glossary on the first page, where you can look
up any financial term that you encounter.
We have some
excellent investor education booklets that we can provide
to our plan members, free of charge. Our two favorite
booklets are "12 1/2 Tips for Asset Allocation"
and "12 1/2 Tips for Women's Retirement" (each
booklet is 31 pages long). We've never seen such
good education materials, and we are working to obtain
more subjects.
We also have
an AIG-Valic financial advisor who been engaged to provide
investor education and asset allocation advice to all
QPP and SPP plan members. He presents investor education
seminars on Central Campus, and can provide you with basic
investor education and show you how to learn more about
the mutual funds that your pension dollars are invested
in. If you want to make sure the “default” allocation
is the best allocation for you, or if you would like to
move out of the “default” allocation into the other funds
in our portfolios, our advisor's assistance is free to
all our QPP and SPP members. If you would like to
receive this type of advice, please call 254-526-1416.
We are also currently working to obtain electronic investor
education materials that we can send to our campuses around
the world.
AIG-Valic also
provides us with a toll-free Client
Care Center at 1-888-568-2542, where you
can get help with your account. You can speak to
a Client Service Professional, and be referred to an investment
consultant. You can request asset reallocations
through this service, and find out about reallocation
rules. This service is available Monday through
Friday from 7 am till 8 pm (Central U.S. time).
The toll-free Client Care Center phone number does not
work for overseas calls. If
you are calling from outside the U.S., please call the
Client Care Center at 281-878-7400 from 8am till 5pm (Central
U.S. Time).
Your CTC
Pension Plan Administration Office is always available
for help, too. Just send us an email to Pension.Plan@ctcd.edu,
so that we can communicate with you around the world,
regardless of your time zone. We can help you with forms,
assistance with accessing your pension account online,
navigating your account online, investor education materials,
and all your distributions. We like to use the email
address to communicate with our plan members, because
so many of our plan members are in different time zones
all around the world.
NEW FEATURE:
PERSONAL PORTFOLIO PERFORMANCE
AIG-Valic
has recently added a new feature to our online pension
account pages. It's called "Personal Performance",
and it calculates the performance of our individual
portfolios. Just log onto your account, and on
your "front page" (the page entitled "Client
Summary"), you will see a new link entitled "Personal
Performance". Click on the link, and you
will see that AIG is now calculating our individual
performance for us, based on the calendar quarter.
There is a link to a FAQ list, which explains how the
performance is calculated.
Section
3: "HOW CAN I OBTAIN
DISTRIBUTION OF MY PENSION FUNDS?" (Information
for Terminating and Retiring Pension Members)
If
you are terminated or retired from CTC, or if you are just
thinking about terminating or retiring from CTC, here is
some information you need to consider when planning your
pension distribution:
AFTER-TAX
VS PRE-TAX:
All of your employee contributions in your “QPP” and/or
“SPP” account are AFTER-TAX (the tax has already been paid).
All of the employer contributions, and all of the accumulated
earnings, are PRE-TAX or “tax deferred” (the tax has not
yet been paid).
UNDER
AGE 55:
If you are under the age of 55 years when you terminate/retire,
and you decide to take all of your funds as a “cash distribution”,
the IRS will impose a 10% “Early Withdrawal Penalty” on
the pre-tax portion of your distribution. In order to avoid
that penalty, you can rollover the pre-tax portion to one
of the retirement vehicles listed below.
BALANCE
UNDER $5,000:
If your account balance is under $5,000, we are required
to distribute the balance to you as soon as practical. If
your account is over $5,000, you can leave your money in
the plan, where it will continue to participate in normal
gains and losses (depending on your asset allocation and
market fluctuations). You can continue to reallocate your
funds, but you will not be able to contribute more funds.
You will continue to get your quarterly statements, as before.
You will still be eligible for free access to our AIG-Valic
financial advisor, as long as you have funds in the plan.
When you reach the age of 70 ½, you will have to
begin taking required minimum distributions annually, just
as you would with an IRA. If you wish to leave your funds
in the plan, but avoid any possible market fluctuations,
you could allocate your entire balance to the Valic Fixed
Account, which pays a guaranteed fixed amount of interest
--- but be sure to talk to your investment professional
or our in-house AIG-Valic financial advisor before you make
any reallocation decisions.
DISTRIBUTION
OPTIONS ARE AS FOLLOWS:
- You
may leave your funds in QPP and/or SPP (if the balance
is over $5,000).
- You
can take a full or partial cash distribution.
- You
can rollover your funds to another plan or financial
instrument.
- You
can establish a periodic distribution plan.
ROLLOVER
OPTIONS:
Your funds can be directly rolled over into any of the following
plans/vehicles:
- A
Traditional Retirement IRA (not a Roth IRA and not a
tax-deductible IRA)
- Another
401(a) plan
- A
403(a) or 403(b) plan
- A
401(k) plan
- A
457 plan
- A
TSP (Thrift Savings Plan)
You
may treat your after-tax dollars and your pre-tax dollars
separately
when planning your rollover, if you wish. For example:
You can roll your entire balance (both the after-tax dollars
and the pre-tax dollars) into one of the plans/vehicles
above (providing that the vehicle you choose accepts both
types of dollars --- some plans only accept pre-tax dollars).
You can take your after-tax dollars as a direct cash distribution
to you, while rolling your pre-tax dollars into one of
the vehicles above (thereby continuing their tax deferred
status). AIG-Valic calls that a “split distribution”.
You
can establish a Traditional Retirement IRA at any bank or
credit union in just a few minutes, at no charge. You can
also use a financial advisor to set up your IRA, or to help
you make arrangements for other types of plans/vehicles.
DISTRIBUTION
FORMS:
There are three types of distribution request forms used
by AIG-Valic, depending on your circumstances:
1.
If you decide to take your money as a direct cash distribution,
please use the AIG-Valic “Distribution
Request Form” (you
can print it out in Section 4 below).
2.
If you decide to take your distribution as a rollover to
another investment plan/vehicle, please use the AIG-Valic
"Rollover/Transfer
Out Form” (you can print it out in Section 4 below).
3.
If you are over the age of 70 ½, AIG-Valic requires
that your distribution be processed using their AIG-Valic
“Required Minimum Distribution Form” (you can print
it out in Section 4 below).
These
forms can be obtained in the following ways:
(1)
Print the forms from this web page (see Section 4 below),
or
(2)
Print the forms from the AIG-Valic web site at www.aigvalic.com/ctc
(under “e-Print”), or
(4)
Email us at Pension.Plan@ctcd.edu and we will send you the
forms, or
(5)
Call the AIG-Valic Client Care Center at 1-888-568-2542.
Why
do we like for you to print your forms from our web page?
That's because AIG-Valic occasionally revises or updates
those forms, and we post those revised or updated forms
on our web page. If you print your forms from the web page,
that will insure that you have the most recent, most useful
form.
NOTE
ABOUT WHERE TO MAIL YOUR DISTRIBUTION
FORMS: The standard
AIG-Valic forms instruct you to send the forms to AIG-Valic
for processing. However, if you send your forms directly
to AIG-Valic, they will have to re-route them to us for
plan administrator approval, which is required by our plan
rules. Therefore, it is much more efficient if you just
mail the forms directly to us at the address below. After
we perform our required procedures on them, we will forward
them to AIG-Valic for final distribution.
Send
forms to:
Central Texas College Pension
Plan
P
O Box 1800
Killeen
, TX 76540-1800
STEPS
IN THE DISTRIBUTION PROCESS – HOW LONG DOES IT TAKE?
Federal
laws require that a person must be officially
terminated/retired (both full-time and part-time) from their
employer in order to request and receive a pension distribution.
This requirement is so important that we are required to
“document” that you are officially terminated/retired, and
attach that documentation to your paperwork, before we can
approve your distribution request form and forward it to
AIG-Valic for processing. How do we obtain the “documentation”
that we must attach? That process starts with your department
or site, which must officially terminate you. Your department
or site will have you sign a “Terminating Personnel Status
Form (“PSF”)”. When that “Terminating PSF” is completed
and signed by you, it is sent to CTC Main Campus, where
it passes through several departments that need that information
in order to do their jobs. For example, it goes through
the Payroll Department, and that alerts Payroll that your
final paycheck (and possibly a vacation payoff) must be
taken care of. It also goes through the Benefits Department,
which must check on the status of your various benefits,
such as insurance, etc. Once every department is finished
with their wrap-up procedures, and you have been issued
your final paycheck, and the college does not owe you any
more pay, the CTC Human Resources Department uses that “Terminating
PSF” to officially terminate you. All of the procedures
required to officially terminate an employee usually take
from 30 to 45 days. In the meantime, we have usually received
your distribution request form, but we must hold it until
we see that the college has officially terminated you. While
we are waiting, we will check every day to see if you have
been officially terminated. As soon as you have been officially
terminated, we will print out a copy of the documentary
proof, showing your official termination date, attach it
to your distribution request form documents, and forward
the original form to AIG-Valic for processing. We send batches
of distribution request forms to AIG-Valic every week, usually
on Thursdays. By the following Tuesday, AIG-Valic will have
the forms. Within 10 business days after they receive the
forms, your distribution check should be in the mail.
In
short, the distribution process moves very quickly ONCE
YOU HAVE BEEN OFFICIALLY TRANSFERRED TO TERMINATED STATUS.
If there is a delay in the process, it is always due to
the time it takes to get you officially terminated by the
college. If your department or your site does not terminate
you by completing the necessary “Terminating PSF”, the process
will be delayed. If there are errors on your “Terminating
PSF” which require a re-do, the process will be delayed.
If you still have an outstanding paycheck or “vacation payoff”,
the process will be delayed until those checks have been
processed through our Payroll system, and any resulting
pension deposits have been sent to AIG-Valic and deposited
into your pension account. Therefore, it is a good idea
to touch base with your department or your site, and make
sure that they have prepared and forwarded the necessary
“Terminating PSF”, so that you can get your pension distribution
as quickly as possible.
TRANSFER
FROM FULL-TIME TO PART-TIME OR FROM PART-TIME TO FULL-TIME:
If your employment status changes from full-time to part-time
(or from part-time to full-time), that change of status
does not qualify as a termination/retirement for pension
plan purposes. It is considered a change of status. In either
case, the individual is still a current and active employee,
and is therefore not eligible to apply for or receive a
distribution of their pension plan funds. That rule applies
to both "QPP" and "SPP" pension funds.
In order for a termination/retirement to generate a pension
distribution, it must be a bona-fide termination/retirement
from both full-time and part-time employment with the employer,
and there must not be any intention or agreement to return
to employment with the employer after a pension distribution
has been made.
OVER
70 ½ YEARS OF AGE: If you
decide to leave your funds in “QPP” or “SPP”, when you reach
the age of 70 ½, the IRS will require that you begin
taking annual “Required Minimum Distributions” (just like
you would with an IRA or other tax-deferred instruments).
The amount of each annual distribution will depend upon
a table published by the IRS, and the distribution factor
will be based on your age and the estimated life expectancy
of yourself and your spouse. Please use an AIG-Valic “Required
Minimum Distribution” form to initiate your distribution.
VESTING:
In many pension plans, there is a “vesting requirement”
connected to the “Employer Contributions”. That is the case
with “QPP”. In “QPP”, you are always 100% vested in your
own “Employee Contributions”, however you must meet a six-year
“vesting schedule” in order to be 100% vested in the “Employer
Contributions”. Your first year, you are 0% vested in the
“Employer Contributions”. The second year, you are 20% vested.
Then 40%, 60%, 80%, and finally, after six years, you are
100% vested in the “QPP” “Employer Contributions”.
“SPP”
does not contain a “vesting requirement”. Therefore, in
SPP, you are always 100% vested in both your “Employee Contributions”
and your “Employer Contributions” from your very first day
in the plan.
TYPES
OF PENSION PLANS: There are two
basic types of employer-sponsored pension plans. Understanding
the difference between these two types of plans may help
you understand your options under our two plans.
A “ Defined Benefit Plan ”: A “Defined Benefit
Plan” plan is an “old-fashioned” type of plan in which
an individual must meet certain age and years-of-service
requirements in order to be eligible to “retire”, at which
point the employer will begin to pay the retiree a monthly
benefit payment. TRS is a “Defined Benefit Plan”.
A “ Defined Contribution Plan ”: “QPP” and “SPP”
are both “Defined Contribution Plans”. This type of plan
does not have most of the typical age and years-of-service
requirements that the “old-fashioned” type of plan has.
Instead, when individuals leaves the employer, they are
simply entitled to their vested balance in their pension
account. They may withdraw their balance in several ways,
but there is no automatic monthly benefit payment.
IF
YOU NEED ASSISTANCE:
Distribution decisions can be complicated. We will be glad
to work with you to give you all the information that we
can to help you make your decision. Just call us at 254-526-1416
or 526-1807.
Section
4: Distribution Forms
For
Cash Distributions (without rollovers),
please use the following "AIG-Valic Distribution
Request Form":
For Rollovers or
Partial Rollovers, please use the following "AIG-Valic
Rollover/Transfer Out Form":
- Instructions
(Coming Soon)
For Required Minimum
Distributions (for individuals over the age of 70 1/2),
please use the following form:
- Instructions
(Coming Soon)
Send your completed forms to the following
address for processing:
Central Texas College Pension
Plan
P O Box 1800
Killeen, TX 76540-1800
We can email the forms to you, as
well. Just write to us at Pension.Plan@ctcd.edu, and
we will send you the forms by email or hardcopy.
Section
5: Address Changes
To
change your address for your AIG-Valic quarterly statements,
please call the AIG-Valic Client Care Center at 1-888-568-2542
(Central U.S. time). If you are calling from outside
the U.S., please call the Client Care Center at 281-878-7400
from 8am till 5pm (Central U.S. time). The quickest
way to change your address is to go into your online account
screen and click on "Change Address".
Section
6: Information for Our Plan Members Over the Age of
70 1/2
All
of our pension plan members who reach the age of 70 ½
must begin taking “Required Minimum Distributions” (“RMDs”)
every year, even if they
are current employees. Some pension
plans allow “RMDs” for “Over 70 ½ participants”
to be deferred until an employee retires --- this deferral
does not exist for “QPP” and “SPP” members. When
you reach the age of 70 ½, the deadline for your
first “RMD” is April 1 of the year after you turn 70 ½
(although that first “RMD” may also be done by December
31 of the year you turn 70 ½). The deadline
for “second year” and all subsequent year “RMDs” is December
31 of each year. Plan members who reach the age of
70 ½ should receive a letter from AIG-Valic every
year, reminding them of the necessity of their “RMD”.
The letter will include an AIG-Valic “Required Minimum Distribution”
form for the participant to complete. If you are
over the age of 70 ½, and you do not receive your
letter and “RMD” form from AIG-Valic by November 15 of each
year, please contact us so that we can send you the proper
form. All “RMD” forms should first be sent to the
CTC Pension Plan Administration Office for plan administrator
signature, after which they will be forwarded to AIG-Valic
for processing.
Section
7: Message to Plan Members about Plan Operating Expenses
There
have always been operating expenses involved in maintaining
CTC’s pension plans, and those expenses have always been
absorbed by our accounts, on a pro rata basis. In the past,
you may not have realized that expenses were being paid,
because the earnings distributions on your quarterly statements
were “net of expenses” (after expenses were paid). Our new
quarterly statements from AIG-Valic allow for more detail,
so you now will be able to see the pension operating expenses
that are being paid.
We believe that our move to our new
account administrator, AIG-Valic, has allowed us to reduce
our operating expenses, due to improved technology and consolidation
of services.
You
may see two types of operating expenses on your pension
statement:
- AIG-Valic
Administration Fees:
These cover AIG-Valic’s costs of administering our accounts,
and include their pension professionals, technology,
legal and tax specialists, investment advisors, Client
Care Center, quarterly statements, etc. These fees are
labelled "Administration Fees" on
your AIG quarterly statements.
- CTC
Operating Expenses:
These
cover the costs of our Pension Plan Administration Office
on the CTC campus. This includes the daily coordination
of all pension matters, advocacy for all our plan members,
monitoring our service providers, support of our Trustees,
and our independent auditors and attorney. These fees
are labelled "Quarterly Fees" on
your AIG quarterly statements.
Section
8: Beneficiary Forms
If
you have not completed a pension plan beneficiary form,
or if you want to update yours, please print out and complete
the form (below), and send it to the Pension Plan office
on central campus. It will be kept in your permanent HR
personnel file. (Your personal will does not cover your
qualified pension plan --- you must have a pension beneficiary
form on record in order to make sure that your wishes are
followed.)
Section
9: Miscellaneous
For “QPP”
participants:
Note: QPP and SPP
are completely separate from TRS (Teachers’ Retirement System
of Texas) and ORP (Optional Retirement Plan). For TRS and
ORP information, please check the Human
Resources web pages.