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.

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

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:  

1. You may leave your funds in QPP and/or SPP (if the balance is over $5,000).
2. You can take a full or partial cash distribution.
3. You can rollover your funds to another plan or financial instrument.
4. You can establish a periodic distribution plan. 

ROLLOVER OPTIONS: Your funds can be directly rolled over into any of the following plans/vehicles:

 

1. A Traditional Retirement IRA (not a Roth IRA and not a tax-deductible IRA)
2. Another 401(a) plan
3. A 403(a) or 403(b) plan
4. A 401(k) plan
5. A 457 plan
6. 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

• AIG-Valic Distribution Request Form (for “QPP” and “SPP") (pdf file)
• Instructions (Coming Soon)

For Rollovers or Partial Rollovers, please use the following "AIG-Valic Rollover/Transfer Out Form":

• AIG-Valic Rollover/Transfer Out Form (for "QPP" and "SPP") (pdf file)

• Instructions (Coming Soon)

For Required Minimum Distributions (for individuals over the age of 70 1/2), please use the following form:

• AIG-Valic Required Minimum Distribution Form (for "QPP" and "SPP") (pdf file)

• 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

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.

  

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: