The Central Office announces the Third Fiscal 2008 open enrollment period for Tax-Sheltered Annuity Enrollments and/or Changes beginning

April 1 - 30, 2008

After this date, first time applications or increases in contributions

may not be made until the next designated open enrollment period.

This memorandum covers the following topics:

Employees with established 403(b) plans
New Federal Regulations
Employees who would like to set up a new 403(b) plan
Note to all employees

1. Employees with established 403(b) plans may increase their salary reductions (contributions to their 403(b) plan) during this open enrollment period. Special catch-up provisions for employees ages 50 and over are available. The Internal Revenue Service (IRS) enforces penalties for excess deductions, therefore you are advised to check with your annuity agent to discuss your Maximum Annual Contribution (MAC).

Employees with established 403(b) plans are allowed to make salary reduction decreases or contribution terminations at any time with submission of the Salary Reduction Agreement Form to the Personnel Office.

2. New Federal Regulations: On July 26, 2007, the Internal Revenue Service (IRS) approved the first major overhaul of 403(b) programs in more than four decades. New regulations for 403(b) programs have been published with a general effective date of January 1, 2009. These rules are aimed at bringing 403(b) programs more closely into line with other salary reduction retirement-savings programs, which limit the number of investment providers and require employers to take greater responsibility for these plans. By the end of 2008 the employer will have to sponsor the 403(b) program. We are working to put a qualified plan program in place as soon as possible but we do not know at this point which providers will be available through the new plan.

Although the general effective date of the final regulations is January 1, 2009, one area of the new final regulations took effect on September 24, 2007. This area involves voluntary employee initiated transfers from one 403(b) provider to another 403(b) provider. If an employee initiates a transfer between providers after September 24, 2007 and certain requirements are not met, that employee's account and all 403(b) accounts maintained by the employee with the employer may be disqualified and subject to applicable taxes under the new 403(b) regulations. If you are planning to transfer money from one 403(b) provider to another, prior to making the transfer, please check with Raquel Batingan to make sure that the company to which you are transferring will be part of our approved vendor list and is willing to sign an Information Sharing Agreement with our district.*

3. Employees who would like to set up a new 403(b) plan should check with Raquel Batingan to make sure that the company being considered is willing to sign an Information Sharing Agreement with our district. If they are you may transfer your contributions to the new plan when it is set up whether or not this specific company is included in the options available. If not you may not be able to access your money until you retire and/or leave the employ of the School District.

To set up a 403(b) plan you must elect the 26-payroll plan.

To begin a Tax Sheltered Annuity, you must contact an agent authorized to issue annuity contracts in the Commonwealth of Massachusetts. You and/or the agent must create an account with an approved 403(b) Service Provider and then forward a Salary Reduction Agreement Form together with Maximum Annual Contribution (MAC) sheet to the Human Resources Office during the designated enrollment period. Paperwork may be FAXED to (413) 549-6108 to the attention of Raquel Batingan.

4. Note to all employees: Once the new 403(b) program has been defined and set up, informational sessions and materials will be provided to educate all of our employees about the program offerings. As one of the outcomes of this conversion we expect that the process for participating will be consolidated, coordinated, and easier to navigate.

If you need any further information regarding the Tax Sheltered Annuity program, please stop by, email or call Raquel Batingan at Ext.1825 in the HR Office located in the Middle School.

*Exchanges are subject to new restrictions that require the receiving product provider to have in place a written Information Sharing Agreement with the employer that is sponsoring the 403(b) plan to share certain compliance related information. In addition, the Information Sharing Agreement must be retroactive to include any exchanges processed after September 24, 2007. Failure to have an Information Sharing Agreement in place by January 1, 2009 could create adverse tax consequences for your account.