Available Products

Annuity Contracts (Fixed Accounts, Variable Accounts)

Fixed and Variable Accounts including publicly-traded Mutual Funds

Fixed and Variable Accounts including 20 publicly-traded Mutual Funds

Bank Investment Options

Selection of Carriers

Yes

Lincoln Nat'l, Valic, TIAA-CREF, Metropolitan Preference, Prudential, Nationwide

Yes

Fidelity

One administrator

One administrator

Ownership of Account

Employee

Employee

Held in trust by the State of North Carolina exclusively for participants and their beneficiaries

Employee

Minimum Contribution Limits

$200 per calendar year

Same as 403(b)(1)

$20 per month

$20 per month

Annual Maximum Contribution Limits*

The lesser of:

1. 100% of compensation or $40,000 (indexed), if less.

2. $12,000 (2003). This deferred limit will increase $13,000 in 2004; $14,000 in 2004; $15,000 in 2006; thereafter, indexed in $500 increments. (Special election for employees with 15 or more years of University service may expand $12,000 limit by up to an additional $3,000. Can be used with the "age 50 catch-up".)

Participants who are age 50 by the end of the plan year may defer an additional $2,000 (2003) above the normal $12,000 (2003) or plan limit. The age 50 catch-up amount will increase to $3,000 in 2004; $4,000 in 2005; $5,000 in 2006; thereafter, indexed in $500 increments.

Same as 403(b)(1)

100% of taxable pay not to exceed the established limit.

Participants who are age 50 by the end of the plan year may defer an additional $2,000 (2003) above the normal $12,000 (20032) or plan limit. The age 50 catch-up amount will increase to $3,000 in 2004; $4,000 in 2005; $5,000 in 2006; thereafter, indexed in $500 increments.

As an alternative to the age 50 catch-up, a participant is eligible to defer up to twice the contribution limit in effect for the 3 years preceding the employee’s normal retirement age.

80% of gross pay not to exceed the established limit. NOTE: This same limit applies to Law Enforcement Officers.

Participants who are age 50 by the end of the plan year may defer an additional $2,000 (2003) above the normal $12,000 (2003) or plan limit. The age 50 catch-up amount will increase to $3,000 in 2004; $4,000 in 2005; $5,000 in 2006; thereafter, indexed in $500 increments.

Aggregation With Other Plans

Yes. If both 403(b) and 401(k) plans are utilized, the amount of the contribution to both plans cannot exceed the 403(b) plan limit, assuming the 401(k) contribution amount does not exceed the 402(g) limit, (currently $12,000 for 2003).

Yes. Same as 403(b)(1).

No coordination required with 403(b) or 401(k) plans; is required with other 457(b) plans.

The "age 50 catch-up" can be used on 403(b) or 401(K) and 457 when an employee contributes to both

plan types.

Yes. If 403(b) and 401(k) plans are utilized, the total of the two contributions cannot exceed the 403(b) limit, assuming the 401(k) contribution amount does not exceed the 402(g) limit (currently $12,000 for 2003).

Transfers Among Carriers While Actively Employed

Yes, to another 403(b)(1) account or 403(b)(7) contract only.

The plan will allow a direct transfer of plan assets to a governmental defined benefit pension plan to be used to purchase service credits or to repay previously refunded forfeitures.

Yes, to another 403(b)(1) account or 403(b)(7) contract only.

The plan will allow a direct transfer of plan assets to a governmental defined benefit pension plan to be used to purchase service credits or to repay previously refunded forfeitures.

Not applicable while actively employed.

The plan may allow a direct transfer of plan assets to a governmental defined benefit pension plan to be used to purchase service credits or to repay previously refunded forfeitures

Not applicable while actively employed.

The plan may allow a direct transfer of plan assets to a governmental defined benefit pension plan to be used to purchase service credits or to repay previously refunded forfeitures

Portability (i.e., transfers) for Terminated Employees

Easily transferable to other non-profit

employers. May permit use of same contract throughout career with

non-profit employers.

Same as 403(b)(1)

(See "Distribution Options for Terminated Employees" below.)

May continue participation with other North Carolina governmental employers. (See "Distribution Options for Terminated Employees" below.)

Loan Provision

Yes, if carrier permits.

No, in most situations.

No

Yes

Withdrawal Provisions

For amounts accumulated since

1/1/89, elective contributions may

be withdrawn under any of the

following circumstances:

Same as 403(b)(1), except all contri- butions, salary reduction and non-salary reduction contributions are subject to these withdrawal restrictions, even those made before 1989.

Withdrawal Penalty

are not subject to any penalty.

following circumstances; death; disability; early retirement

under a plan after separation at

age 55; separation from service at

any age and selection of a life

annuity option; or, if the with-

drawal is necessary to meet

deductible medical expenses.

before age 59 ½ due to separation from service or hardship are

subject to a penalty tax equal to

10% of the amount of distribution. This is in addition to ordinary

income taxes due.

Same as 403(b)(1)

No penalty under above provisions.

Same as 403(b)(1)

Distribution Requirement

Contributions and earnings received

after 12/31/86 are subject to federal minimum distribution requirements. Participant must begin to receive distribution no later than April 1st following the year in which age 70 ½

or retirement is attained, whichever

is later. A 50% penalty tax will be

levied on amounts that were not, but

should have been distributed. Contributions made prior to 1/1/87

are subject to different rules.

Same as 403(b)(1)

Distribution must commence no later than April 1st following the year in which an individual attains age 70 1/2, or upon severance from employment, whichever is later. Effective 1/1/89, a 50% penalty tax will be levied on amounts that were not, but should have been distributed. A benefit payout schedule must be established to assure that all funds are scheduled to be repaid during the retiree's life expectancy.

Same as 457 plan

Distribution Options at Termination of Employment

May receive distribution according to contract/account terms, or may rollover to another 403(b), 401(k),

457(b) plan, or to an IRA.

Same as 403(b)(1)

May receive distribution according to contract/account terms, or may be transferred to another employer 457 plan if that plan accepts the transfer. May rollover to a 403(b), 401(k) or IRA, if tracked separately.

May receive distribution according to contract/ account terms, or may be rolled over to IRA or another 401(k) plan, 403(b) or 457 plan if permitted.