ACC Adjunct Faculty Benefits Presentation

1. ACC Adjunct Faculty Benefits Presentation Susan Corbett, Benefits Manager April 25, 2014

2. Austin Community CollegeMoney Purchase Plan (ACCMPP) • Statutory Basis: Omnibus Budget Reconciliation Act 1990 • Type of Plan: 401(a) • Type of Investment: Group Fixed Annuity / Mutual Funds (8) • Annuity Company: Ohio National Life Insurance Company • Company Rating: A+ by A.M. Best; AA by Standard & Poors • Vesting Time: 1 hour • Employee Contribution: 6% (pre-tax dollars) • Employer Contribution: 1.5% • Interest Rate: Will vary.  Historically 4-5% • Plan Administrator: Merkley, Newman & McLaws, Inc. (800) 580-2176, ext. 1 or www.mnmpensions.com • Refund Date: 90 days after the close of the month in which you receive your final paycheck or later at the participant’s direction.

3. Austin Community CollegeMoney Purchase Plan (ACCMPP) cont. • Who must participate in this plan? This plan is mandatory by Federal Law for ALL adjunct faculty and hourly employees except qualified ACC students. • Who is exempt from contributing?  • Employees currently contributing to the Teacher Retirement System of Texas (TRS) or to the Texas Optional Retirement Program (ORP). • Employees receiving retiree benefits from either TRS or ORP. • ACC students (at least 6 credit hours) who work for the College. • Employees who previously enrolled in ORP and are vested. • What if I am in another retirement program with a private company or the State of Texas?  Because ACC does not participate in Social Security, you are still required to be in the ACCMPP.

4. Austin Community CollegeMoney Purchase Plan (ACCMPP) cont. • If I quit, can I get my money back? Yes. If you permanently terminate employment with ACC, complete a Distribution Election form requesting a refund. This form is available online and in the Benefits Department. Submit this form directly to the Third Party Administrator by fax or mail. • When will I actually get the refund? Refunds are made 90 days after the close of the month in which you receive your final paycheck, or later at the participant's direction. • Is there a penalty for taking my money out of the plan before age 59 1/2? A 10% penalty tax may apply on some or all of your account balance upon distribution on all contributions and interest earnings will apply. To avoid a penalty you may rollover your account to another qualified retirement account.

5. Austin Community CollegeMoney Purchase Plan (ACCMPP) cont. • Will I owe taxes on the refund? You may have already paid taxes on part of your account. However, some or all of your account has not been taxed. Therefore, at least part of the refund will be taxable income for the calendar year in which you receive your refund. You will receive a 1099R form which details the taxable portion of your refund. • What happens to the 1.5% the College contributed for me? You will receive the College's contributions (1.5%) and your contributions (6.0%) when you request a distribution. • Can I leave my money in the plan if I quit? If you have no contributions for (18) months and less than $1,000, you must take a lump sum distribution. If you have between $1,000 and $5,000, you can leave the funds, roll the funds to another qualifying retirement plan, or request a lump sum distribution. If you have more than $5,000, you can leave your funds in the plan until you request a distribution, or roll the funds over to another qualifying retirement plan.

6. Austin Community CollegeMoney Purchase Plan (ACCMPP) cont. • Can I take out my money if I am not currently working but plan to work soon? Yes, if you are not working and not contributing to the ACCMPP you can request either a rollover or distribution of your account. When you return to work at ACC your ACCMPP contributions will start back up automatically. • Where can I get more information about this plan? Call the Office of Human Resources at 512/223-7800, 512/223-7230 or 512/223-7617 or go to www.mnmpensions.com to get more information.

7. Supplemental Retirement Plans • Tax Sheltered Annuity (TSA) 403(b) and 457 Deferred Compensation Six Big Benefits • Your contributions and investment earnings aren't taxed until you withdraw the money. That means your money grows much faster. • Your contributions are deducted from your paycheck • Your deductions are pre-taxed, so you pay less in income taxes. • YOU decide how your money is invested. • In some cases, you can contribute more than the maximum allowed. That means your savings grow further. • If you change employers, you can take your 403(b)/457 funds with you. A 403(b) or 457 plan is probably a good choice for you if you: • are already investing some of your take home pay. • are not struggling from paycheck to paycheck. • pay substantial income taxes. • want to invest more for retirement. • have an emergency fund to cover three to six months living expenses.

9. Supplemental Retirement Plans (cont.) • Employees can choose the 457 plan, the 403(b) plan or any combination of either plan for the maximum annual pre-tax deductions allowable by law (currently $17,500 per plan, or $23,000 per plan if over age 50). Plans can be started, stopped or changed at any time during the year. • Please select a company from the approved vendor list (available on the ACC website), contact the selected company directly to establish an account (application can be completed online, in person, or by phone to Customer Service) with the selected company. Once you have an account established, go to Retirement Manager at: https://www.myretirementmanager.com/?AUCC to set up the deduction from your ACC paycheck. • Additional changes (of maximums, amounts or companies, etc.) should be completed through the same Retirement Manager website. NOTE: Changing vendors requires establishing a new company account, in addition to making the change in Retirement Manager.

10. Teacher Retirement System (TRS) TRS is a 401(a) defined benefit plan. Employment that makes you eligible for membership in TRS is: • regular employment in a public, state-supported educational institution in Texas that is expected to last for a period of 4½ months or more, • for one half or more of the full-time workload, and • with compensation paid at a rate comparable to the rate of compensation for other persons employed in similar positions. Note: ACC adjunct faculty working at least one half or more of the full-time workload and paid at a rate comparable to the rate of similar positions will be enrolled in TRS.

11. Teacher Retirement System (TRS) cont. Adjunct faculty exceptions that would allow for TRS membership/contributions: • If you work at ACC and are simultaneously contributing to TRS through another TRS-covered employer, a TRS Verification form must be completed by the other employer certifying you are participating in TRS outside of ACC. TRS contributions must be taken from your ACC paychecks for as long as you are currently contributing to TRS at another TRS-covered employer. Note: ACC will request verification in the Fall and Spring to continue TRS contributions through ACC.

12. Teacher Retirement System (TRS) cont. • At the end of the year, if you took on additional duties as an Adjunct Faculty member that put your workload at or over 50%, you can submit TRS form 22I to the ACC Payroll Manager Al Sims if you wish to attain TRS credit for that year. Your service will be verified on this form and given back to you to submit to TRS. If TRS determines that your service is creditable based on the completed 22I, they will bill you for the amount of your TRS contributions plus any applicable interest and actuarial costs.