Page 10 - 12202017 Bryant Test 2

457(b) – Tax Shelter

A 457(b) Deferred Compensation Plan is an optional voluntary retirement plan available for all regular
employees of your District. Just like a 403(b) Plan, contributions to a 457(b) are made before taxes by
participants. Employees may enroll in a 457(b) Plan though one of the authorized 457(b) providers listed
on page 23 of this guide. Participation in a 457(b) Plan, in addition to or in lieu of a 403(b) Plan, can add
to the retirement income employees could receive when they retire. A 457(b) Plan may have permanent
life insurance as an option in addition to annuities. Employees should speak with their agent and/or
financial advisor to see how participation can help meet future financial goals.

For those who elect to participate in the 457(b) Plan, they are able to contribute 100% of their salary up to
the 2018 annual maximum of $18,500. Some employees may qualify for an age-based additional amount.
only
However, unlike 403(b) accounts, an additional special catch-up provision (if allowed by the plan) is
allowed during the final three (3) full calendar years of service prior to the year of normal retirement as
defined by the plan. Please see page 12 for specific information regarding contribution limits.

Employees may participate in both a 403(b) Plan and a 457(b) Plan without regard to an overall
coordinated contribution limit. This allows participants to contribute up to the maximum calendar year
limit into each plan. For example, a participant could defer a maximum of $18,500 to a 403(b) account
and $18,500 to a 457(b) account for 2018, for a total of $37,000 during the calendar year, depending on
your annual earnings. These amounts could be higher for employees who qualify for special catch-up
provisions and/or age-based additional amounts.

Participants may not withdrawal funds from their 457(b) accounts except in certain specified
circumstances: separation from service from employer, age 70 1/2 (but you must stop all contributions to the
plan if still employed), retirement, death, disability, unforeseen emergency (if allowed by the Plan), or De
Minimis Withdrawal.

Provisions for retirement distributions from 457(b) Plans during retirement are more flexible. Participants
may elect to take distributions at any time after separation from service or defer distributions until age

70 1/2. Distributions are subject to normal income during the year in which they are received.

A De Minimis withdrawal, if allowed by the plan, will allow a one-time closing of an account if your
balance is $5,000 or less and you have not deferred any money to the account in the last 24 months and
have not used this provision before.

In a 457(b) Plan, there is no restriction on age for withdrawing funds so there is not a 10% early
distribution penalty as with the other qualified retirement plans such as a 403(b) and 401(k) Plan. Thus,
participants who plan to retire and begin withdrawals prior to age 55 may benefit from this 457(b) rule
which allows for withdrawals without incurring the 10% early distribution penalty.

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