Overview Bencor Special Pay Plan

1
OverviewBencor Special Pay Plan

• For Employees of the School District of Lee
  County

2
Introduction

• BENCOR NATIONAL GOVERNMENT EMPLOYEES RETIREMENT
  PLAN (BENCOR Special Pay Plan)
• Offered by BENCOR, Inc.
• Allows governmental entities and their employees
  to take maximum advantage of the Federal tax
  laws.

3
Eligibility

• Must be administrative, supervisory-technical,
  confidential, or instructional employee.
• Must be eligible for accumulated sick leave pay
  and/or annual leave pay from the School District
  of Lee County.
• Must be retiring, terminating or enrolled in
  DROP.
• Must have accumulated sick and annual leave equal
  to 1,000.00 or more.

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Eligibility

• Accumulated sick leave pay and annual leave pay
  of employees who retire, terminate employment, or
  enter into the DROP program will be placed into
  the BENCOR Special Pay Plan subject to
  contribution limits.

5
Contribution Limits

• In the last year of employment, the Maximum Plan
  Contribution cannot exceed 50 of the Plan Year
  Compensation or 46,000, whichever is less.
• Plan Year CompensationWages for the previous 12
  months Accumulated Sick Leave Pay Accumulated
  Annual Leave Pay (Special Pay) that is to be
  paid in that year.

6
Plan Trustee

• U.S. Bank

7
Plan Sponsors

• Diversified/Transamerica
• BENCOR, Inc.

8
Plan Administrator

• BENCOR Administrative Services
• Toll free number 1-888-258-3422

9
Investments

• Diversified/Transamerica offers 17 investment
  options.
• Special Pay Plan contributions are automatically
  placed in a fixed account (Potentia General
  Account) and can only be invested in other
  accounts in accordance with the participants
  instructions.

10
Investment Expenses

• No fee charged for contributions that remain in
  the Guaranteed Pooled Fund (i.e. fixed) Account
  option.

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Distributions

• Distributions may be taken upon
• 1) Termination of employment
• 2) Total disability
• 3) Death

12
Distributions

• The participant may choose to leave money in the
  Plan, self-directing future investments and
  taking distributions as desired in a tax-deferred
  manner.
• Distributions may be taken in a lump sum or as
  periodic payments taken monthly, quarterly,
  semi-annually, or annually.

13
Distributions

• To receive a distribution, the participant must
  complete a DISTRIBUTION/LOAN REQUEST FORM. A
  distribution packet is available from BENCOR
  Administrative Services at 1-888-258-3422.
• Distributions will be processed in a timely
  manner with minimal waiting (once BENCOR receives
  the money from the District AND the distribution
  request form has been submitted).

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Distributions

• Participants (or surviving spouses) can roll
  over Plan Assets into an IRA or into another
  qualifying plan after termination of employment
  from the School District of Lee County.

15
IRS Penalties

• There is no IRS penalty for any Plan participant
  age 55 or older who elects to withdraw plan funds
  provided the participant separated from service
  during the calendar year in which he/she turned
  age 55, or later.

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IRS Penalties

• Plan participants who separate employment before
  the calendar year in which they turn age 55 and
  who elect to withdraw Plan funds prior to age 59
  ½ are subject to a 10 early withdrawal penalty
  by the IRS.

17
IRS Penalties

• The School District will make whole (subject
  to applicable withholding tax) participants who
  are subject to this penalty if they request all
  of their funds from the Plan Administrator within
  60 days of termination of employment with the
  School District of Lee County.

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Excess Sick and Annual Leave

• Any eligible sick leave or annual (vacation)
  leave in excess of plan contribution limits will
  be paid to the participant, subject to Federal
  withholding and related payroll taxes (Social
  Security and Medicare).

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Employee Responsibilities

• 1) Complete BENCOR/Diversified/Transamerica
  enrollment form
• a. Select account(s) (if not previously
• selected)
• b. Identify beneficiaries
• 2) Forward completed form to BENCOR
• 3) Retain packet and all pertinent information
• Note If no selection is made, eligible
  dollars will automatically be paid into the
  Guaranteed Pooled Fund (Fixed) Account.

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End Part I
21
BENCORCalculation Example
22
BENCOR CalculationInformation Needed

• Plan Year Salary (July 1 Term. Date)
• Hourly Rate
• Base salary Degree Supplement
• divided by hours worked per year
• Final Sick Leave Balance (In Hours)
• Final Annual Leave Balance (In Hours)
• Payment Eligibility
• (12 Years at Lee County School Board 100)

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Sample Data
John Anderson is a teacher with a Masters degree
and 30 years of experience at the Lee County
School Board. He is retiring on May 30,
2007. At May 30, 2007 he will have 1,500 hours of
unused sick leave. He does not earn annual
leave. His 2006/2007 plan year salary includes a
base salary of 49,833, a Masters degree
supplement of 2,500, and various other
supplements totaling 2,667.
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BENCOR Calculation Example

• Plan Year Salary 55,000
• Base salary Degree Supplement Other
  Supplements
• 49,833 2,500
  2,667
• Hourly Rate (49,833 2,500) divided by
• (7.5 x 196 days) 35.60 /hr.
• Sick Leave Balance 1,500 hours
• Payment Eligibility (12 Years at Lee County
  
  
• School Board 100)

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Calculation of Sick Leave Pay-off
Sick Leave Balance 1,500.00 hrs
Payment Percentage x 100
1,500.00 hrs
Hourly Rate x _ 35.60
Equals Sick Leave Pay-off 53,400.00
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Calculation of Plan Year Compensation
Plan Year Salary 55,000.00
Sick Leave Pay-off 53,400.00
Equals Plan Year Compensation 108,400.00
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IRS Limitations
Maximum Contribution to BENCOR for the 2007
Plan year is the lesser of 46,000 or 50 of
Plan year Compensation
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Calculation of Actual BENCOR Contribution
50 of Plan Year Compensation 54,200.00 (1)

IRS Limit 45,000.00 (2)

Sick Leave Pay-off 53,400.00 (3)

Actual BENCOR Contribution 46,000.00
(Lesser of 1, 2 or 3)
Note If sick leave pay-off is less than 1,000
no contribution will be made to
BENCOR.
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Calculation of Remainder of Terminal Pay
Accumulated Sick Leave 53,400.00

Less BENCOR Contribution 46,000.00

Remainder of Terminal Sick Leave 8,400.00
paid directly to Employee



Note Applicable Income and Social Security Taxes
will be deducted from the remainder portion paid
directly to the employee.
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End Part II