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A Newsletter for the State of Connecticut Deferred Compensation Plan

November 2001

	The August issue of "Getting There" described some of the features of the recent tax law, EGTRRA (the Economic Growth and Tax Relief Reconciliation Act of 2001). EGTRRA means there will be several important improvements to the State's Deferred Compensation Plan, beginning on January 1, 2002. This issue explains how you can take advantage of some of these new plan improvements right away.
State Comptroller Nancy Wyman	Early Bird Gets the Worm - Save More for Your Retirement on January 1!

There's good news! Thanks to EGTRRA, beginning January 1, 2002, you can contribute even more to the State's Deferred Compensation Plan. For 2002:

• The maximum annual contribution limit is increasing to $11,000; and
  
  

• If you're age 50 or older by December 31, 2002, you will be able to contribute an extra $1,000. That's a total of $12,000.

In addition, if you are eligible to contribute to a 403(b) plan, you may contribute up to $11,000 to that plan, and another $11,000 to the State's Deferred Compensation Plan. However, if you want to take advantage of the special age 50 catch-up contribution, keep in mind that the extra $1,000 you can contribute is a per-person limit. If you contribute an extra $1,000 to one plan, you will have reached your limit.

What's more, for certain income levels, you may be eligible for a tax credit when you contribute to the plan. You can receive a credit for 10% to 50% of your contribution, up to a maximum contribution of $2,000.

To increase your payroll deductions to the plan, you need to fill out a new Participant Agreement/Beneficiary Designation Form (Form CO-783),which is available from your financial services provider. If you would like your elections to be effective for the first pay period in January, be sure to fill out the form and send it to your financial services provider by November 28, 2001. This will allow your financial services provider enough time to process the form and deliver it to the State Comptroller's Office by the December 5, 2001 deadline. If you want to make changes for a later date, contact your financial services provider for the appropriate deadline.

See the back page for some tips on filling out Form CO-783.

Investment Fund Performance & Operating Fees

For the Period Ending September 30, 2001

You may invest your contributions with any one of the plan's three financial services organizations: ING Aetna Financial Services, 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 September 30, 2001.

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:

• Recognize that while a fund's past performance may help you understand how well or poorly it has performed over a period of time, it's no guarantee of future results.
  
  
• Consider the total expenses each fund charges as well as the kinds of services or benefits it provides. Keep in mind that you can reduce your overall investing costs by monitoring these expenses and taking them into account in your investment selection process.

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.

* 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 Aetna representative.

Using Form CO-783

Increase Your Contributions

To change the amount you would like to defer (or contribute) to the plan, check the "Change: Deferral Amount" box at the top of Form CO-783, and fill out sections A, B, C and E. In section C, you must check and complete the areas as shown below. Fill in the amount you would like to contribute each pay period, and the date you would like your contributions to begin. The State will deduct this amount from each paycheck before state and federal taxes are deducted.

Make Special Age 50 Catch-Up Contributions

If you are age 50 or older, and want to contribute up to an extra $1,000 over the annual maximum to the plan next year, you may do so with a special catch-up contribution. These special age 50 catch-up contributions are only available if you are not making regular catch-up contributions. (Regular catch-up contributions may be made during the three years before your normal retirement date.)

To make special catch-up contributions to the plan, check the "Change: Deferral Amount" box at the top of Form CO-783, and fill out sections A, B, C and E. In section C, you must check and complete the areas as shown below.

Designate a Beneficiary

Your beneficiary is the person or entity that will receive your account balance in the event of your death. You may change your beneficiary at any time by completing a new Form CO-783.

To change the beneficiary, check the "Change: Beneficiary Designation" box at the top of the form, and fill out sections A, B, D and E. (If you also want to change the deferral amount, check the "Change: Deferral Amount" box at the top of the form and complete section C as well.)

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