The credit is reduced by taxable distributions received from any savings or qualified plan or IRA during the taxable year for which the credit is claimed and two prior taxable years, as well as the time after the end of the year and prior to the due date for filing the return for the year.
Return to top...
How do I sign up for PSR?
Enroll online at http://myGApsr.csplans.com
or contact CitiStreet at 1-866-694-2777.
Return to top...
When will my payroll deductions begin after I
enroll?
Your deductions should begin during the next calendar month after
you enroll. If you enroll during the middle of August, for example, deductions should begin on September 15 if you are paid semi-monthly, or September 30 if you are paid monthly.
Return to top...
Must I enroll in PSR during Open Enrollment?
No. Unlike the
Flexible Benefits Program options, you can enroll in PSR (or stop or change contribution amounts) at any time during the year. Most changes will take effect during the month after
you request the enrollment or change.
Return to top...
When I
enroll, who determines how my money is invested?
You do. Not only do you get to choose into which investment options your current contributions are directed (and in what proportions), but you can also make investment transfers – switch part or all of your balance to different investment options.
In addition, another feature that makes PSR even more attractive to some people is the availability of
Lifecycle Portfolios that participants can choose based on their anticipated
date of retirement or desired withdrawal start date. For some participants who maintain a high enough account balance, a Self-Directed Brokerage option is also available for an additional fee, with access to thousands of mutual funds as well as individual stocks and bonds.
Return to top...
What if I participate and later have medical bills or other expenses that I can’t pay because I don’t have the money?
Withdrawals from the 401(k) Plan due to immediate and heavy financial need related to specific categories and, from the 457 Plan, due to a sudden, extraordinary and unforeseeable event that creates a severe financial hardship, are available under extremely limited circumstances. Loans are not available from the Peach State Reserves plans. Please read the
following regarding these types of withdrawal requests:
The Peach State Reserves Section 457 and 401(k) Plans were designed by the Internal Revenue Service as a mechanism for saving towards retirement on a pre-tax basis. The Plans are not designed for emergency expenses or financial hardship. Therefore, it is very difficult to qualify for withdrawals prior to separation from state service. Withdrawals due to Financial Hardship are limited and must meet
the approval of the Deferred Compensation Hardship Review Committee. The financial hardship application must be completed and accompanied by supporting documentation, such as copies of paycheck stubs, lease/rental agreements, account statements, billings, loan agreements, invoices and any other documentation appropriate to substantiate the claim of financial hardship.
Withdrawals cannot be made from the 457 Plan for the purchase of a home, educational expenses or other discretionary items or services. In addition, 457 withdrawal requests must be the result of a sudden, unforeseeable event that has created a severe financial hardship.
The only assets available for 401(k) financial hardship withdrawal are those elective deferrals made by the participant, excluding any earnings associated with those deferrals. 401(k) financial hardship withdrawals will only by considered for the following categories:
o MEDICAL CARE - Unreimbursed expenses for (or needed to obtain) medical care that would be
deductible under Section 213(d) of the Internal Revenue Code.
o PRINCIPAL RESIDENCE REPAIR - Expenses for the repair of damage to the Participant’s
principal residence that would qualify for the casualty deduction under Section 165 of the Code (determined without regard to whether the loss exceeds 10% of adjusted gross income).
o PRINCIPAL RESIDENCE PURCHASE – Unreimbursed costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments and lease/rental agreements).
o EVICTION OR FORECLOSURE - Payments necessary to prevent the eviction of the Participant
from his or her primary personal residence or the foreclosure on a mortgage secured by that residence.
o POST-SECONDARY EDUCATION – Unreimbursed payments of tuition, room and board, and other
ancillary educational expenses of the Participant, Participant’s spouse or Participant’s dependent(s) (as defined under Code Section 152, and without regard to section 152(d)(1)(B)) incurred with respect to a regular course or program of study at a post-secondary educational institution or other institution of higher learning for current or upcoming school term.
o FUNERAL EXPENSES - Payments for burial or other funeral expenses incurred by the
Participant with respect to the death of the Participant’s parent, spouse, children or dependents (as defined under Code Section 152, without regard to Code Section 152(d)(1)(B).
No other expenses will be considered. If you are approved for a 401(k) financial hardship withdrawal, elective deferral contributions are prohibited for the 12-month period following the withdrawal. After the 12-month period, the 401(k) Contribution Limitation for that year will be reduced by the amount of contributions made
in the previous year.
Employer contributions (for employees of participating Community Service Boards and the Georgia Lottery Corporation) are not eligible for financial hardship withdrawal, regardless of the vesting service completed. All employees should be setting aside savings on an after-tax basis that they can access without restriction or penalty. Only after such an emergency fund is established should someone
consider enrolling in PSR. Participants should contact PSR staff if they need additional information.
Return to top...
Who decides if my situation meets the requirements for a financial hardship withdrawal?
The plan's Third-Party Administrator, CitiStreet, is responsible for reviewing each written withdrawal application and its substantiating documentation, determining by consensus whether the application meets the Internal Revenue Service (IRS) guidelines. If an application is denied, the participant can appeal that decision to the Executive Director. Appeal decisions by the Executive Director are final.
Return to top...
Can I take out a loan from PSR?
No. While many private sector 401(k) Plans offer loans, through which participants may access funds to make a down payment on a house, or to supplement educational expenses, the state of Georgia 401(k) and 457 Plans do not have loan provisions, and the money you contribute to the Plan(s) is not eligible for withdrawal in cases of financial need, except under extremely limited circumstances (and in the case of 401(k), with additional potential tax penalty). The state offers PSR as a tax-sheltered mechanism to help employees prepare adequately for retirement, rather than as a mechanism for other, more short-term goals.
Return to top...
If I decide to participate but later want to stop my contributions, can I discontinue them at any time?
Yes. Contributions are completely voluntary. You can stop current deductions at any time
by accessing your account with CitiStreet. Under most circumstances, your request
to start or change contribution amounts will take place on the first payroll of
the month following your request, except stopping deductions, which can take be
effective as early as the first payroll following your request.
Return to top...
If I stop contributions, can I start them again later?
Yes.
Reenroll through CitiStreet at any time. The contributions may start again no earlier than the calendar month after your request has been processed and approved.
Return to top...
If I decide to participate in PSR, how will the amount of my Social Security benefits or my retirement pension be affected?
Not at all. Your Social Security taxes will continue to be calculated and withheld just as they were before you enrolled in the Plan. Your Social Security and State Retirement benefits will continue to be based on your total gross salary. And when you retire, the amount of PSR benefit payments you withdraw will have no effect on the amount of Social Security benefits you’ll be eligible to receive.
Return to top...
If I
enroll, can I use my account balance as collateral for a loan?
No. Federal tax law does not allow a participant to assign, pledge, collateralize, sell or otherwise transfer his or her assets, except upon receipt of the funds following separation from service or other qualifying event that provides for distribution.
Return to top...
I don’t think I make enough to contribute to a long-term savings program like PSR. How would these savings affect my take home pay?
Maybe you can’t afford not to contribute to PSR. You might be surprised at how little your contribution to PSR will actually impact your take home pay. Remember that part of what you will be contributing would have been deducted from your check and paid in taxes, anyway. The exact dollar amount of the reduction depends on how much you make, how many withholding allowances you are claiming, and how much you’re contributing, but it will always be less than your actual contribution amount. For example:
If you are currently subject to a marginal tax rate of 34% (28% for federal, 6% state), and elect a contribution of $100 per pay period, $100 will be invested in your account, and you will be earning on that full $100. However, you’ll see your take home pay go down by only $66. The other $34 that is being invested in your account is covered by dollars that were already coming out of your check as income tax withholding. The $34 simply gets swapped from Uncle Sam’s account to your own to grow tax-deferred until you withdraw it!
Return to top...
How much can I contribute to PSR?
Both the 457 and 401(k) Plans have identical contribution limits, and you can contribute the maximum to both plans.
Yes, $30 per month, for each Plan ($15 per pay period for those on a semi-monthly payroll).
Yes. You can start, stop or change the amount of your contributions at any time
by accessing your account with CitiStreet. The change will take effect in the calendar month after your request has been
made, except stopping deductions, which can take be effective as early as the first payroll following your request.
Yes, in some cases. Contributions to both a 403(b) and 401(k) are subject to a combined limit equal to the normal Plan maximum (i.e. $15,500 in 2008). This combined limit does not apply to contributions to both a 457 and a 401(k) or to contributions to both a 457 and a 403(b); in both cases you may contribute the maximum to both plans (e.g. combined limit of $31,000 in 2008).
This is a special feature only allowed in the 457 Plan, available during each of the three years before the calendar year in which you are eligible for full, unreduced retirement benefits and plan to retire, but only IF you have not already contributed the maximum allowable annual amounts throughout your 457 eligibility period. Full, unreduced retirement benefits from both the Employees’ and Teachers’ Retirement Systems are defined as either 30 years of creditable service, regardless of age OR age 60 with 10 or more years of creditable service (the applicable retirement system would have to verify your eligibility for unreduced retirement benefits).
During each of these three years, you can increase your contributions above the normal plan maximum. The normal plan maximum and corresponding Catch-Up maximum for each year through 2008 are shown in the table below:
Employees who are age 50 or older may make additional contributions to Peach State Reserves. This includes anyone who will become age 50 at any time during the year. These are additional pre-tax contributions in excess of the normal contribution limits. The Age 50 Additional Contribution can be made to both the 457 and 401(k) plans, however the maximum is combined for 401(k) and 403(b) plans. If eligible, you may make these additional contributions even if you have contributed the maximum for every year in which you were eligible for the plan. The chart below outlines the limits on these “Additional Contributions” through 2008:
Only if you are eligible to purchase those credits. Eligibility for service credits is generally determined by state law for specific situations (e.g. buying back military time). You must contact your retirement system to determine eligibility. If you are eligible,
you can use your Peach State Reserves assets to fund the service credit
purchase. The transaction would be made as a direct rollover to your retirement
system.
Your investments continue to reflect the performance of your chosen investment options even when you are not making contributions (i.e. they may reflect a gain or a loss, depending upon the investment). Further, you retain the right to make any changes, as well as the right to re-start your contributions or change contribution amounts, for as long as you are employed by the State. If you terminate employment, you may continue to exchange value between investments, however you may not make any further contributions to your account, other than eligible rollovers from other plans.
Yes, as long as you meet the eligibility requirements. Contributions can be made to both the 457 and 401(k) plans for the maximum amount (i.e. $31,000 in 2008, or $41,000 if age 50 or older). Federal tax law does not permit contributions to 401(k) and 403(b) plans, in aggregate, to exceed the normal plan maximum (i.e. $15,500 for 2008 in total to both 401(k) and 403(b), or $20,500 if age 50 or older).
There are several different types of withdrawals, with different applicability to the two different Plans:
