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Getting Started


What is a 457 deferred compensation plan?
A governmental 457(b) deferred compensation plan (457 plan)1 is a retirement savings plan that allows eligible employees to supplement any existing retirement and pension benefits by saving and investing pre-tax dollars through voluntary salary deferral. Contributions and any earnings on contributions are tax-deferred until money is withdrawn. Distributions are usually taken at retirement when many participants are typically receiving less income, and may be in a lower income tax bracket than while working. Distributions are subject to ordinary income tax.

1 All references to the 457 plan are to a governmental 457(b) plan.

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Why should I participate in the Plan?
You may want to participate if you are interested in saving and investing additional money for retirement and/or reducing the amount of current state and federal income tax you pay each year. Your City of Torrance 457 Plan can be an excellent tool to help make your future more secure.

You may also qualify for a federal income tax credit by participating in this Plan. For more information about this tax credit, please contact your Great-West Retirement Services® representative.

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Is there any reason why I should not participate in the Plan?
Participating may not be advantageous if you are experiencing financial difficulties, have excessive debt, do not have an adequate emergency fund (typically in an easy-to-access account), or if you expect to be in a higher tax bracket during your retirement.

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Who is eligible to enroll?
All current full-time employees of the City of Torrance are immediately eligible to participate in the Plan.

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How do I enroll?
Complete the appropriate enrollment forms, found in the Enroll Now section of this Web site, indicating the amount you wish to contribute, your investment option selection(s), and a beneficiary designation(s). Please return the form(s) to your Great-West Retirement Services® representative.

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What are the contribution limits?
In 2009, the maximum contribution amount is 100% of your compensation, less any mandatory before-tax contributions to a governmental pension plan, or $16,500, whichever is less. In subsequent years it may be indexed in $500 increments.

Participants in the 457 Plan have two different opportunities to catch-up and contribute more during the final years of their career. "Standard" catch-up allows participants in the three calendar years prior to normal retirement age to contribute more (up to double the annual contribution limit - $33,000 in 2009) into the 457 Plan.

The additional amount that you may be able to contribute under the "standard" catch-up option will depend upon the amounts that you were able to contribute in previous years but did not. Also, participants turning age 50 or older in 2009 may contribute an additional $5,500. In subsequent years it may be indexed in $500 increments. You may not use the "standard" catch-up provision and the Age 50+ catch-up provision in the same year.

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How much are the employer contributions?
The City of Torrance will make a discretionary match to your contributions; please check with your employer for more details.

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What are my investment option choices?
A wide array of core investment options is available through your Plan. Each option is explained in further detail in your Plan's Fund Overviews, located in the Investment Options section of this Web site.

Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information you may obtain prospectuses for mutual funds, any applicable annuity contract and the annuity's underlying funds and/or disclosure documents from your registered representative. Read them carefully before investing.

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Managing Your Account

How do I keep track of my account?
Great-West Retirement Services® will mail you a quarterly account statement showing your account balance and activity. You can also check your account balance and move money between investment options on this Web site or by calling KeyTalk® at (800) 701-8255.

Transfer requests made by the Web site or via KeyTalk® received prior to 4 p.m. Eastern Time on business days will be initiated at the close of the business day. The actual effective date of your transaction may vary depending on the investment options selected. Access to KeyTalk® and the Web site may be limited or unavailable during periods of peak demand, market volatility, systems upgrades and maintenance, or other reasons.

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How do I make investment option changes?
Use your Personal Identification Number (PIN) and Social Security Number to access either this Web site or KeyTalk?. You can move all or a portion of your existing balances between investment options (subject to Plan rules) and change how your payroll contributions are invested.

Access to KeyTalk® and the Web site may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance, or other reasons.
The account owner is responsible for keeping the assigned PIN confidential. Please contact Great-West Retirement Services® immediately if you suspect any unauthorized use.

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How do I make deferral changes?
Fill out a Salary Reduction Agreement, available in the Forms section of this Web site.

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Rollovers

May I roll over my account from my former employer's plan?
Yes. But only approved balances from an eligible governmental 457(b), 401(k), 403(b) or 401(a) plan or an Individual Retirement Account (IRA) may be rolled over to the Plan. Please check with your Great-West Retirement Services® representative regarding any applicable fees on the rollover account.

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May I roll over my account if I leave employment with my current employer?
If you sever employment with your current employer, you may roll over your account balance to another eligible governmental 457(b), 401(k), 403(b) or 401(a) plan if your new employer's plan accepts such rollovers. You may also roll over your account balance to an IRA.

Please keep in mind that if you roll over your 457 Plan balance to a 401(k), 403(b) or 401(a) plan or an IRA, distributions taken before age 59 1/2 may also be subject to the 10% early withdrawal federal tax penalty. Please contact your Great-West Retirement Services® representative for more information.

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Vesting

When am I vested in the Plan?
Vesting refers to the percentage of your account you are entitled to receive from the Plan upon the occurrence of a distributable event. Your contributions to the Plan and any earnings they generate are always 100% vested.

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Distributions

When can I receive a distribution from my account?
Qualifying distribution events are as follows:

  • retirement;
  • permanent disability;
  • unforeseeable emergency (as defined by Internal Revenue Code and your Plan's provisions);
  • severance of employment (as defined by Internal Revenue Code provisions);
  • attainment of age 70 1/2;
  • death (your beneficiary receives your benefits);
  • In-service transfer to purchase service credit.

Each distribution is subject to ordinary income tax except for an in-service transfer to purchase service credit.

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What are my distribution options?

  1. Leave the value of your account in the Plan until a future date;
  2. Receive:
    • periodic payments;
    • fixed annuity payments;
    • partial lump sum with remainder paid as periodic payments or annuity payments;
    • a lump sum;
  3. Roll over your account balance to an eligible governmental 457(b), 401(k), 403(b) or 401(a) plan or to an IRA.

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What happens to my account when I die?
Your designated beneficiary(ies) will receive the remaining value of your account, if any. Your beneficiary(ies) must contact a Great-West Retirement Services® representative to request a distribution.

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Fees

Are there any recordkeeping or administrative fees to participate in the Plan?
There are no recordkeeping or administrative fees to participate in the Plan. There is no annual Contract Maintenance Charge.

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Are there any fees for the core investment options?
Each investment option has an investment management fee that varies by investment option. These fees are deducted by each investment option's management company before the daily price or performance is calculated. Fees pay for trading and other management expenses.

Funds may impose redemption fees on certain transfers, redemptions or exchanges if assets are held less than the period stated in the fund's prospectus or other disclosure documents. For more information, please refer to the fund's prospectus and/or disclosure documents.

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Are there any distribution fees?
For the Plan, there are no distribution fees.

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Loans

May I take a loan from my account?
Your Plan allows you to borrow the lesser of $50,000 or 50% of your total account balance. The minimum loan amount is $1,000, and you have up to 5 years to repay your loan - up to 15 years if the money is used to purchase your primary residence. There is a $60 origination fee for each loan, and a $35 annual fee.

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Taxes

How does my participation in the Plan affect my taxes?
Because your contributions are taken out of your paycheck before taxes are calculated, you pay less in current income tax. You do not report any current earnings or losses on your account on your current income tax return either. Your account is tax-deferred until you withdraw money, usually at retirement.

Distributions from the Plan are taxable as ordinary income during the years in which they are distributed or made available to you or to your beneficiary(ies) at your then current tax rate. A 10% early withdrawal federal tax penalty may also apply to distributions taken before age 59½.

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Investment Assistance

Can I get help with my investment decisions?
Employees of Great-West Retirement Services® and the City of Torrance cannot give investment advice. There are financial calculators and tools on the Web site that can help you determine which investment options might be best for you if you would like to construct your Plan account yourself.

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How do I get more information?
Visit this web site or call KeyTalk®, toll free at (800) 701-8255, for more information. The Web site provides information regarding your Plan, financial education information, financial calculators and other tools to help you manage your account.

Call or visit your local
Great-West Retirement Services® office at:
500 N. Central
Suite 220
Glendale, CA 91203
(800)-382-8924


Access to KeyTalk® and the Web site may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance, or other reasons.

Securities, when offered, are offered through GWFS Equities, Inc., a wholly owned subsidiary of Great-West Life & Annuity Insurance Company.

Investment options are offered through mutual funds and/or a group fixed and variable deferred annuity issued by Great-West Life & Annuity Insurance Company.

Great-West Retirement Services® refers to products and services provided by Great-West Life & Annuity Insurance Company and its subsidiaries and affiliates.

Your Plan may use one or more of the following annuity contract form numbers: GDC 990 FFSII. Not intended for use in New York.