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A Newsletter for the State of Connecticut Deferred Compensation Plan

May 2002

State Comptroller Nancy Wyman Good news - The State of Connecticut's Deferred Compensation Plan can now accept rollovers from certain types of retirement plans, thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). In this issue of "Getting There," read about what types of rollovers are now permitted and how you can take advantage of this important opportunity.
State Comptroller Nancy Wyman

New Rollover Contribution Rules

What's a Rollover?

If you have worked for several employers, you may have several retirement savings accounts. Rollovers allow you to consolidate your investments into one account. With one account, you'll find it easier to keep track of your money. And now, if you have pre-tax money in a 401(k), 403(b) or governmental 457(b) plan with a previous employer, or if you have pre-tax money invested in an individual retirement account (IRA), you may be able to roll that money into the State of Connecticut's Deferred Compensation Plan. You are not allowed to roll over money that has already been taxed into the State of Connecticut's Deferred Compensation Plan. You can roll over money into the State's plan if you are a plan participant (that is, you have an authorized Participation Agreement/Beneficiary Designation Form CO-783 on file).

How to Make a Rollover

Here's how you can roll over your savings from a previous account into the State's plan:

1.Call your selected financial services organization to get the form. You'll receive a "Qualifying Rollover Contribution Application - Form CO-785" and a letter for you to send to your previous employer or financial institution. The letter asks the previous administrator or financial institution to provide acceptable proof that you are rolling over pre-tax money. The entire amount you want to put into the State's plan must be initially rolled into a single financial services organization. After that, you can re-invest the amount with any of the plan's financial services organizations.

2. Mail the letter. If the money is coming from a previous employer's plan, send it to your former employer. If you are rolling over money from an IRA, send it to your IRA financial institution.

3. After you receive the rollover check, send the check, proof that the funds are eligible for rollover and your completed Form CO-785 to your financial services provider.

 

ING Aetna Is Now ING

Please note that ING Aetna Financial Services is now ING Financial Advisors, LLC. As a result, several fund names have changed. The new names are in bold on the chart on page 2.

Investment Fund Performance & Operating Fees

For the Period Ending March 31, 2002

You may invest your contributions with any one of the plan's three financial services organizations: ING Financial Advisors, LLC (member SIPC), Hartford Life Insurance Company and Phoenix Investment Partners. The following charts will help you evaluate your investment choices - both mutual funds and annuity options. They show the historical rates of return for each financial services organization's available investment options and the various operating fees that may be assessed against these options for the period ending March 31, 2002. The rates of return columns are "net of expenses" and reflect the actual returns that would be applied to your account. This means that they already exclude the operating fees a financial services organization may charge you for managing, investing or marketing a particular investment option. Operating expenses appear in separate columns.

About Your Fund Choices

To help you identify between these two types of options, variable annuities appear in italic print. When comparing two similarly styled mutual funds or annuity options, be sure to: Since each financial services organization offers similar investment opportunities, it's a good idea to review the materials from each of these organizations before you make your decision as to where to invest your money. Then, select the one financial services organization that offers the investment options and products that best match your personal financial goals.

 

ING FINANCIAL ADVISORS
  Return on Investments
(net of expenses)		 Operating Expenses
Last Quarter Annual Rates of Return
Level of Risk Investment Options 1/1/02-3/31/02 1 Year Annualized
5 Years 		Management
Fees 		Other
Expenses 		Total
Expenses
High Janus Aspen Series Aggressive Growth Portfolio -9.14% -19.44% 7.00% 0.65 0.81 1.46
Janus Aspen Series Worldwide Growth Portfolio -1.03 -8.27 8.73 0.65 0.84 1.49
PPI MFS Emerging Equities Portfolio* -5.80 -7.93 3.21 0.66 0.93 1.59
PPI Scudder International Growth Portfolio* -0.29 -13.34 2.58 0.80 1.00 1.80
Medium ING Index Plus Large Cap VP -0.26 -1.94 9.91 0.35 0.89 1.24
ING Growth and Income VP -0.70 -4.07 3.50 0.50 0.88 1.38
ING Small Company VP -0.13 13.08 14.01 0.75 0.92 1.67
AIM V.I. Growth Fund -3.73 -12.81 2.61 0.61 1.02 1.63
Fidelity VIP Equity-Income Portfolio 3.62 4.18 9.09 0.48 0.88 1.36
Fidelity VIP II Contrafund Portfolio 2.68 2.98 10.55 0.57 0.89 1.46
Janus Aspen Series Growth Portfolio -0.04 -9.62 8.10 0.65 0.82 1.47
Low ING Balanced VP, Inc. -0.60 1.86 8.30 0.50 0.89 1.39
ING Bond VP -0.81 3.52 5.82 0.40 0.90 1.30
ING Money Market VP 0.24 2.36 4.26 0.25 0.89 1.14
ING Fixed Account-457/401 5.30 NA NA 0.00 0.00 0.00
Calvert Social Balanced Portfolio -1.55 -2.14 6.42 0.70 0.98 1.68
Janus Aspen Series Balanced Portfolio 0.78 1.12 13.02 0.65 0.81 1.46

* After the close of business on November 26, 1997, the PPI MFS Emerging Equities fund replaced the Alger American Small Cap fund and the PPI Scudder International fund replaced the Scudder VLIF International fund. The five-year rate of return includes performance for the Alger American Small Cap and the Scudder VLIF International funds from 4/1/96 to 11/26/97 and the current funds from 11/27/97 to the present. For more information, please call your ING representative.

HARTFORD LIFE INSURANCE COMPANY
Return on Investments
(net of expenses)		 Operating Expenses
Last Quarter Annual Rates of Return
Level of Risk Investment Options 1/1/02-3/31/02 1 Year Annualized 
5 Years		 Management
Fees		 Other
Expenses		 Total
Expenses
High American Century Ultra    -1.21% 1.68% 9.41%  1.00  0.70  1.70
Hartford International Opportunities Y    0.02 -5.83 1.48  0.85   0.96 1.81
Hartford Small Company Y  0.60    8.87 11.26  0.85  0.84 1.69
Janus Worldwide    -1.06  -8.37 7.67 0.65   0.90 1.55
Medium American Century Income & Growth  0.97  2.78  9.75  0.69  0.70  1.39
American Century Value  2.86  17.14   11.68 1.00  0.70  1.70
Fidelity Adv. Growth Opportunities   -1.01 -1.08  1.76  0.43  1.44  1.87
Hartford Capital Appreciation HLS     -1.27 -4.54 15.19  0.64 0.77  1.41
Hartford Dividend and Growth Y   4.36 5.34  10.73  0.75  0.82  1.57
Hartford MidCap Y  4.18  13.33  NA  0.85  0.82  1.67
Hartford Index HLS  -0.03 -1.00  8.86   0.40 0.78  1.18
Hartford Stock HLS    -0.54 -2.41  9.78  0.46 0.77  1.23
Janus Twenty     -5.88 -12.09 9.72 0.65  0.93  1.58
Low Hartford Advisers HLS     -0.29 0.39  8.95 0.63 0.77  1.40
General Account  4.50  NA   NA None   None None
Hartford Bond Income Strategy Y   -0.83  3.56 6.44  0.65  0.85  1.50

 

PHOENIX INVESTMENT PARTNERS
Return on Investments
(net of expenses) 		 Operating Expenses
Last Quarter Annual Rates of Return
Level of Risk Investment Options 1/1/02-3/31/02 1 Year Annualized 5 Years Management Fees Other Expenses Total Expenses
High Phoenix-Aberdeen Worldwide Opportunities A 2.08% -8.12% 6.51% 0.75 0.70 1.45
Phoenix-Seneca Mid-Cap Edge A 1.88 -7.58 16.50 0.80 1.71 2.51
Phoenix-Engemann Small-Mid Cap Growth A -5.30 -4.48 10.48 0.97 0.86 1.83
Phoenix-Aberdeen International A 2.12 -10.10 1.45 0.75 0.62 1.37
Medium Phoenix Duff & Phelps Core Equity A -0.24 -14.22 NA 0.75 2.20 2.95
Phoenix-Engemann Nifty Fifty A -5.08 -13.66 ;1.16 0.82 0.78 1.60
Phoenix-Engemann Capital Growth -4.50 -13.36 1.16 0.66 0.42 1.08
Phoenix-Oakhurst Growth & Income A    -0.30 0.52 NA 0.75 1.13 1.88
Phoenix-Seneca Growth A -0.93 -2.05 10.65 0.70 0.74 1.44
Phoenix-Zweig Managed Assets A 1.53 1.37 5.24 1.00 0.51 1.51
Low Phoenix-Engemann Balanced Return A -3.27 -3.13 7.78 0.76 0.87 1.63
Phoenix-Goodwin Multi-Sector Short Term Bond A 0.66 5.10 5.99 0.55 1.00 1.55
Phoenix-Duff & Phelps Core Bond -0.52 4.09 5.93 0.45 0.55 1.00
Phoenix-Goodwin Money Market A 0.33 2.57 4.56 0.40 0.33 0.73

 

Completing Form CO-785

You must complete the entire form (sections A through E). Please note:

Fill in the date of your distribution (the date on the rollover check). Check the type of plan the money is coming from (a 401(k), 403(b), governmental 457(b) or an IRA). Then, fill in the amount of the rollover and the plan name/financial institution. You must also indicate if this is a direct or an indirect rollover. Image of accountant looking at adding machine tape
checkbox Box 1: if the rollover is from a previous employer's 403(b), 401(k) or governmental 457(b) plan .
 
checkbox Box 2: if the rollover was put into a "conduit IRA" after it came from your employer's plan .
 
checkbox Box 3: if the rollover is from an IRA

Indirect or Direct Rollover? What's the Difference?

In an indirect rollover, your previous employer (or IRA financial institution) will send you a check that is payable to you. You must deposit the check into the State's plan or establish an IRA within 60 days of the date on the check. By federal law, your previous employer or financial institution must withhold 20% of the taxable part of your distribution to pay federal income taxes. However, you can substitute money from other sources to make up for the 20% that was withheld and deposit the entire taxable amount of your distribution into the State's plan. If you do this, you may qualify for a refund of the withheld amount when you file your income taxes. 

In a direct rollover, your previous employer (or IRA financial institution) will send you a check payable to the financial services organization you selected. After you forward the necessary items to your selected financial services organization, they will deposit the check into your account. By making a direct rollover, you continue to postpone paying taxes on the money since taxes are not withheld.

Questions?

If you have any questions about the rollover process, please call your financial services organization. If you have questions about the tax implications of a rollover, contact your tax advisor.

IMPORTANT NOTE: The information presented in this newsletter is not intended as investment advice. Its purpose is to help you understand the investment choices available through the State of Connecticut's Deferred Compensation Plan. Your financial strategy and investment choices are entirely your own and should reflect your personal needs and circumstances.

State of Connecticut personnel, including the Human Resources Department staff, cannot provide investment advice. For more information, you may want to consult with a professional financial advisor.

The investment information is current as of March 31, 2002.

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