ayout 1 - State of Michigan 401(k) and 457 Plans

Good News!
NEWSLETTER
The State of Michigan recently negotiated a new contract for plan administration services for the 401(k)
and 457 Plans. After completing the Request For Proprosal (RFP) process, the contract has been awarded to
WINTER 2007
CitiStreet, the current administrator for the Plans. Along with the new contract come program enhancements
aimed at your success, encouraging you to take a hands-on approach as you plan for your future.
PROGRAM ENHANCEMENTS
Expanded Field Staff. Two additional Plan Consultants
have been added to the Michigan-based CitiStreet
team. Expanding the staff allows for more meetings
with individual participants and more seminars
throughout the state.
No matter where
The seminar curriculum addresses a variety of topics,
including: basic plan provisions, understanding your
investment options, asset allocation techniques, how to
use the Advisor Service, what to do when retirement is
near, and more.
you are in your
career — just
starting out, or
preparing to
Expanded hours for the Plan Information Line.
Customer Service Representatives, will soon be available
Monday – Friday, 8 a.m. to 8 p.m., an improvement
over the current 9 a.m. to 5 p.m. schedule. Call
the Plan Information Line at 1-800-748-6128 if you
need help with transactions or for specific information
about the plans or your account.
retire — there’s a
seminar offered
to help you.
Check the enclosed
Seminar Schedule
Lower fees. Along with the new service contract
comes a new, lower fee structure for the investment
funds. As you know, each investment fund charges a
management fee, and these fees are deducted from
each investment fund’s performance. The lower the
fee, the more money stays in your account, working for
to review upcoming
sessions and to
see when Plan
Consultants will
you. More information about lower fees will be
available soon on the Plan’s Web site and in the
next quarterly newsletter.
New Roth 401(k) option coming this Spring.
Soon you’ll have a new optional way to save in
the 401(k) Plan that provides unique tax benefits.
Your current contributions are pre-tax and result in
reducing your income taxes now. If you choose the
Roth 401(k) feature, you may put money into your
account after it is taxed and your Roth contributions
grow tax-free. As long as you hold the Roth account
for at least five years and don’t withdraw from it
before age 591/2, you won’t pay any more taxes on
your contributions or investment earnings. When you
begin taking Roth distributions according to these rules,
your withdrawals will be made completely tax-free.
A Roth 401(k) Guide will be mailed in March 2008.
It will outline the benefits of the Roth 401(k), help you
determine if Roth 401(k) contributions are right for you,
and walk you through how to make your contribution
election. Please note if you have an existing 401(k)
Plan, you are not required to take any action.
be in your area.
SURVEY SAYS …WE’RE MAKING GREAT STRIDES
An independent survey firm conducted an annual customer satisfaction
survey among randomly selected State of Michigan employees and retirees
who participate in the state’s 401(k) and 457 Plans. The survey indicates
that there is a very high overall level of satisfaction with the products,
services, and communications provided by CitiStreet, the Plans
administrator. In fact, overall satisfaction went from 90% to 92% over
the last year. More importantly, we learned that this year’s respondents
believe themselves to be more investment savvy than in prior years.
If you’d like to start taking a more
hands-on approach to planning your
future, the Plans continue to offer
many opportunities to expand your
understanding of the retirement
planning process. Take steps today
by visiting the Financial Resource
Center on the Plan Web site,
accessing the CitiStreet Advisor
Service, or attending a seminar.
(See the enclosed schedule.)
1-800-748-6128
|
http://stateofmi.csplans.com
WINTER 2007
How much is really enough?
Today, the general rule of thumb is that you’ll need
about 80% of your pre-retirement income after you
News You Can Use
retire. That sounds good, but rules of thumb are
Does the current market have you looking for shelter,
shortcuts. They’re solutions that are supposed to
or searching for opportunities?
work for the “average” person. Could you live
Check out the article, Market Correction: Don’t Let Short-Term Market
on 80% of your current income now? What will
Fluctuation Scare You Off, posted on the Plan Web site in the Resource
Center under Featured Content.
be different for you in retirement?
When it comes to calculating your future retirement income
needs there’s a host of things to take into account.
Are you the kind who wears out your credit card?
Maximum Contribution Limits
The 2008 limits for each Plan are the same as in 2007:
• Employee contribution limit: $15,500
Catch-Up Provision for both plans:
Are you committed to living a debt-free life?
• Age 50 or Over Catch-Up: $5,000
Are you planning to work in retirement?
For the 457 Plan only:
Are you planning to travel extensively or take
up new hobbies?
The more you plan to do, the more income you’ll need,
and the more you’ll need to save. That’s a given. No one
knows what the future really holds, but today, there’s one
rule of thumb to follow:
• Three-Year Catch-Up Provision: $15,500
— May not be taken in the same year as the 457 age 50
and older catch-up.
— Contact CitiStreet to see if you qualify.
Tax Savers Credit Continues
Did you know you may be eligible for a tax credit on your federal taxes
of up to 50% of the first $2,000 in contributions that you make to your
Contribute as much as you
can for as long as you can.
Remember, retirement planning isn’t something you do
one time and assume you’re set for the next 20 or so years.
Too many things can change. Your investments may not
perform as you expected. You may have to dip into your
savings. You may want to retire earlier than you intended.
All of these factors and more can affect how much you’ll
need to retire comfortably or, indeed, whether you’re
ready to retire at all. So go over your retirement plans
periodically to monitor your progress and to see if you
need to make any adjustments. To see the impact of
changing your contribution rate, visit the Plan Web site
and use the Online Calculator. Go to My Account, select
the Contributions tab, and click on Plan Savings Calculator.
You can also access articles about the benefits of saving for
retirement online in the Financial Resource Center.
TOLL-FREE
TDD LINE
ONLINE
Plan account when filing your tax return? To qualify, your Adjusted Gross
Income (AGI) must be less than $25,000 if you are filing as a single, or less
than $50,000 if you are filing jointly. You’ll find more information on the
Plan Web site. Select Plan Information, then Plan Highlights, click on
Building your Savings.
Tax forms available online
1099 forms for 2007 will be mailed before the end of January 2008 to
those taking distributions from the Plans. After 1099s are mailed, they will
also be available under My Correspondence & Records, a new section
on the Plan Web site. So if you want to get a jump on completing your tax
filings, simply log on to your account at http://stateofmi.csplans.com with
your PIN to access copies of your current 1099 forms.
1-800-748-6128
1-800-276-4106
http://stateofmi.csplans.com
For seminar information or to set up a personal meeting:
LANSING AREA OFFICE
TOLL-FREE
The foregoing newsletter is not intended to provide legal, tax or
investment advice. For such advice, participants should contact
their legal, tax or investment advisors.CitiStreet administers the
401(k) and 457 Plans for State of Michigan employees.
517-636-6077
800-381-5111 ext. 66071
© 2007 by CitiStreet
SKU#MI4Q07