MEMORANDUM OF UNDERSTANDING
The purpose of the Memorandum of Understanding is to make you aware of the highlights, restrictions and cost of your plan. It is not intended to cover all specific details of the plan.
I understand that my participation in the Plan is governed by the terms and conditions of the Plan Document.
I understand and acknowledge the following:
1. REGARDING 457(b) PLANS:
The combined total annual pre-tax or Roth contribution amount to all 457(b) plans is the lesser of $17,500 or 100% of includible compensation. Under certain circumstances, addi-
tional amounts above the limit may be deferred into the Plan if (1) I will attain age 50 or older during the current calendar year, or (2) I am within three years of Normal Retirement
Age and did not defer the maximum amount in prior years. The Plan Document provides additional details about contribution limits. Contributions in excess of maximum amounts
are not permitted and will be considered taxable income when refunded. It is my responsibility to ensure my contributions do not exceed the annual limit.
It is my responsibility to adjust my contribution amount to comply with the law. Excess contributions will be returned to me and reported on a 1099R tax form. I acknowledge that it is
my responsibility to make sure my total contributions, including any 457(b), 403(b) and/or 401(k) Plan Contributions, fall within the specified limits. A Nationwide Retirement Solutions
Representative can provide assistance in determining my contribution limits.
All withdrawals of funds must be in compliance with the Internal Revenue Code and applicable regulations, some of which are expressed in the Plan Document.
Funds may be withdrawn from the plan ONLY when one of the following events occurs:
l Termination of State Employment
l Attaining age 70 1/2 even if still employed.
l Unforeseeable Emergency approved by the plan
l Total Disability
l Death
l When taking a loan
l In some cases a transfer for purchase or repayment of service credits in a Governmental Defined Benefit Plan may be permitted.
Roth distributions not meeting the criteria for a qualified distribution may be subject to income tax and a 10% penalty.
2. REGARDING 401(k) PLANS:
My combined total annual pre-tax or Roth contribution is subject to contribution limitations described in Sections 415(c) and 402(g) of the Internal Revenue Code. My maximum contri-
bution will be the lesser of $17,500 or 100% of my compensation under section 415 of the Code. Additional amounts above the limit may be deferred into the Plan if I will attain age
50 or older during the current calendar year. I understand that current or future participation in additional benefit plans, such as 403(b) and/or 401(a) plans, may affect my maximum
annual contribution limit under the Maryland 401(k) Plan, in accordance with the U.S. Internal Revenue Code.
It is my responsibility to adjust my contribution amount to comply with the law. Excess contributions will be returned to me and reported on a 1099R tax form. I acknowledge that it is
my responsibility to make sure my total contributions, and other 403(b) Plan and/or 401(k) Plan, including Roth, contributions, fall within the specified limits. A Nationwide Retirement
Solutions Representative can provide assistance in determining my contribution limits.
Funds may be withdrawn from the plan ONLY when one of the following events occurs:
l Termination of State Employment (an early withdrawal penalty may apply if your separation from state service is prior to the age of 55.)
l Attaining age 59 1/2 even if still employed.
l Financial Hardship (a 10% early withdrawal penalty tax may apply prior to age 59 1/2)
l Total Disability
l Death
l When taking a loan
l In some cases a transfer for purchase or repayment of service credits in a Governmental Defined Benefit Plan may be permitted.
Roth distributions not meeting the criteria for a qualified distribution may be subject to income tax and a 10% penalty.
If applicable, amounts contributed to the 401(a) match account, when the Match Program is in effect, do not affect employee 401(k) limits but may impact elective contributions or
employer contributions made on my behalf into other retirement plans. I acknowledge that I am responsible for monitoring these limits and notifying the Plan Administrator if neces-
sary.
3. REGARDING 403(b) PLANS (available for education employees only):
My total annual contribution is subject to contribution limitations described in Subsection 403(b) of the Internal Revenue Code. My maximum contribution will be the lesser of
$17,500 or includible compensation as defined under Section 415 of the Code, or my basic exclusion allowance. I understand that current or future participation in additional ben-
efit plans, such as 401(k) plans, may affect my maximum annual contribution limit under the Maryland 403(b) Plan, in accordance with the U.S. Internal Revenue Code.
It is my responsibility to adjust my contribution amount to comply with the law. Excess contributions will be returned to me and reported on a 1099R tax form. I acknowledge that it is
my responsibility to make sure my total contributions and other 403(b) Plan and/or 401(k) Plan Contributions, fall within the specified limits. A Nationwide Retirement Solutions
Representative can provide assistance in determining my contribution limits.
Funds may be withdrawn from the plan ONLY when one of the following events occurs:
l Termination of State Employment (an early withdrawal penalty may apply if your separation from state service is prior to the age of 55.)
l Attaining age 59 1/2 even if still employed.
l Financial Hardship (a 10% early withdrawal penalty tax may apply prior to age 59 1/2)
l Total Disability
l Death
l When taking a loan
l In some cases withdrawal for purchase or repayment of service credits in a Governmental Defined Benefit Plan may be permitted.
If applicable, amounts contributed to the 401(a) match account, when the Match Program is in effect, do not affect employee 403
(b) limits but may impact elective contributions or
employer contributions made on my behalf into other retirement plans. I acknowledge that I am responsible for monitoring these limits and notifying the Plan Administrator if neces-
sary.
REGARDING ALL PLANS
4. The fund prospectuses are available upon request at www.marylanddc.com or by calling 1-800-545-4730.
5. I must notify Nationwide Retirement Solutions of any address changes, beneficiary changes, contribution amount changes, allocation changes or errors on my account statement.
6. I may re-allocate my contribution amount any time without limitation.
7. Contributions, in the form of salary reductions, will be made each pay period until I notify Nationwide Retirement Solutions otherwise. A short delay may exist before my contributions
are invested due to the time required to place the money into the investment options.
8. I will receive a statement of my account quarterly.
9. My distributions must begin no later than April 1st following the year I reach age 70 1/2. If I work beyond age 70 1/2, my distributions must begin no later than April 1st following the
year I separate from service or retire. All distributions are taxable as ordinary income and subject to income tax in the year received. My distributions must be made in a manner that
satisfies the minimum distribution requirements of IRC Sec. 401(a)(9), which currently requires benefits to be paid at least annually over a period not to extend beyond my life
expectancy. Failure to meet minimum distribution requirements may result in the payment of a 50% federal excise tax.
10. The funds in my account may be eligible for rollover to a traditional IRA or to an eligible retirement plan. The "Special Tax Notice Regarding Plan Payments" provides detailed informa-
tion about my options. Due to important tax consequences related to distributions, I have been advised to consult a tax advisor. I expressly assume the responsibility for tax conse-
quences relating to any distribution, and I agree that neither the Plan nor the Plan Administrator shall be responsible for those tax consequences.
11. Eligible Rollover Distributions are subject to 20% Federal Income Tax withholding.
12. The share value calculated at the time of exchange depends on the investment option. Contact your Nationwide Retirement Solutions representative for specific information for each
investment option.
13. All telephone exchange requests will be recorded for the participant’s protection.
14. The value of my account in my chosen mutual funds can fluctuate and result in a gain or loss depending on the market activity.
15. An annual asset fee up to 0.14% will be assessed on my account balance. Part of this fee, 0.05%, supports the Maryland Teachers and State Employees Supplemental Retirement
Plans’ Board of Trustees’ budget. The remaining 0.09% goes toward services provided by Nationwide Retirement Solutions. No account will be charged a combined board fee and
Nationwide Retirement Solutions fee of more than $2,000.00 annually. A Nationwide Retirement Solutions representative can provide further details.
16. The investment options available under the plan are selected by the Maryland Teachers and State Employees Supplemental Retirement Plans’ Board of Trustees and are subject to a
periodic review by the Board, its staff and its Investment Advisor to assure that the options continue to meet established criteria. The Board reserves the right to add additional funds
to the plan and replace or remove existing funds. If existing funds are replaced, the Board reserves the right to require or direct the transfer of existing balances and ongoing contribu-
tions from any fund which has been eliminated as an option within the same risk category that I had previously selected.
17. I have received an explanation of the fixed option and understand that the rate of return produced by that option will vary over time, depending on the rates paid by the contracts that
make up the fixed option(457(b), 401(k) & 401(a) only)
18. Money allocated to each Investment Contract Pool, as selected by the Board, will earn a fixed rate of interest for the contract term as selected by the Board. Participation in the fixed
option will result in a blended interest rate based upon the Investment Contract Pools used to determine my account value. I understand that an Investment Contract Pool is not a
mutual fund (457(b), 401(k), & 401(a) only)
19. Transfers between investment options are provided for under the Plan subject to limitations or restrictions (including redemption fees), if any, as imposed by the investment providers.
I understand that any information regarding limitations or restrictions as they apply to the Plan may be obtained from the Plan Administrator.
20. If applicable, I understand that no changes will be effective until they are processed by Nationwide Retirement Solutions.
21. Distribution from the 401(a) account may occur at the time of the participant’s death, disability, or separation of service. Withdrawals from the 401(a) account prior to age 59 1/2 may
be subject to a 10% federal tax penalty for early withdrawal.
PLEASE NOTE: When the Match Program is in effect, your 401(a) match money will automatically be directed to a separate account and can be managed separately.
22. Targeted Retirement Funds are managed by T. Rowe Price and are composed of other T. Rowe Price mutual funds. There is no guarantee that the investment objective of any fund
will be achieved. Investment return and principal value will fluctuate, so that an investor’s shares, when they are redeemed, may be worth more or less than their original cost. The
Targeted Retirement Funds are designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying
funds. Therefore, you are indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds.
23. Nationwide Retirement Solutions, Inc. and Nationwide Life Insurance Company have endorsement relationships with the National Association of Counties and the International
Association of Firefighters-Financial Corporation. More information about the endorsement relationships may be found online at www.nrsforu.com.
24. Financial & Realty Services, LLC may provide education and marketing support services on behalf of NRS. Its Retirement Consultants are registered representatives of FSC
Securities Corporation (FSC), member FINRA, SIPC. FSC and Financial & Realty Services, LLC are not affiliated with MSRP, NRS or NISC.
