When did the new pension plan go into effect?

Employees hired after September 7, 2011 will go into the Defined Contributions (DC) Plan.

How does the new pension plan differ from the Defined Benefit (DB) Plan?

Prior to retirement the only difference in the two plans is that in the DB Plan you must be vested 10 years to be eligible for the retirement benefit. However in the DC Plan you only have to be vested 5 years to keep the employer contributions.

In retirement, the DB Plan provides a monthly benefit for your lifetime. In the DC you can receive a lump sum at retirement to use as income during retirement.

Please speak with your financial advisor for more detailed information.

What does the City contribute to the DC Plan and how much do I contribute?

Employees are required to contribute 6% of earnings and these contributions are deducted from each paycheck. All employee contributions are pretax and deducted from the gross pay. The City of Sarasota is required to match the 6%.

Additionally, if you also contribute 2% of compensation into the 457(b) deferred compensation plan, the employer will match 100% up to 2%.

Why will I have two retirement accounts?

Each employee in the DC Plan will have 2 retirement accounts. They will have an account with their contributions and an account with the employer matching contributions. These accounts cannot comingle.

When will I be fully vested in the employer account?

You will always be 100% vested in your contributions in the plan. If you were hired before September 7, 2011, you will be 100% vested in the employer contributions credited to your account. If you were hired on or after September 7, 2011 you will be 100% vested in the employer contributions after 5 years of service.

What if I want to save more for retirement?

The optional deferred compensation plan 457(b) is available to use for additional retirement savings. You may contribute as little as $10.00 per paycheck. Please see your VALIC advisor for assistance in completing the paperwork.

Do I have access to any of the money in the DC Plan while I am still employed at the City?

No, this money is not available to you until you either retire or separate from service. It is important to remember that withdrawals from this plan could be subject to tax penalties. Anyone under the age of 59 Ĺ who withdraws from the account after their separation from service will receive a 10% tax penalty and be taxed 20% by the IRS. However if you retire and are 55 years of age or older, your distributions from this account will not be subject to the 10% penalty from the IRS. It is recommended that you seek the advice of a tax advisor before you make any withdrawals from your account.

How are the contributions invested in the DC plan accounts?

Each employee can determine how to invest both the employee account and the employer account. VALICís financial advisor will assist you in determining a risk tolerance that is appropriate for your age, investment experience and other factors. There are a wide range of investments offered.

What if I want to make changes to my investments?

You may make changes online in your account or by contacting VALICís Customer Care Center or Carolyn Garvey at (941) 228-2822 or carolyn.garvey@valic.com.

Do I need to do anything on a regular basis with my account?

We recommend that you review your quarterly statements and if you need assistance with understanding your statement to contact VALIC Customer Care or Carolyn Garvey at (941) 228-2822 or carolyn.garvey@valic.com.

Does VALIC offer financial planning assistance?

Yes, your VALIC financial advisor can assist you by running a financial plan for you so that you can have an idea of what your future retirement income may look like. VALIC offers managed plans.

I see Financial Education Seminars being offered. Is participation at the seminars available to everyone?

Yes, all employees are encouraged to attend the seminars. Please talk to your supervisor for approval to attend.

Who do I talk to if I have questions or concerns about my accounts?

Please contact VALICís financial advisor, Carolyn Garvey at (941) 228-2822 or carolyn.garvey@valic.com.