STATE OF CONNECTICUT
THE STATE COMPTROLLER
September 29, 2008
To Participants In The State's Defined Contribution Plans:
With recent events in the financial markets, I would like to address potential concerns about the security of retirement accounts held by ING, the administrator of the state's Alternate Retirement Program, 457 Plan and 403(b) Plan.
While no one can ensure you against investment losses during a period of market turbulence, I am confident that the plans' assets are secure. The following information details some of the protections that have been implemented.
The State of Connecticut selected ING to administer the state's three defined contribution plans because of its financial strength and experience in managing large governmental plans. Assets in each of the defined contribution plans are held in a separate trust at ING National Trust, a national banking association. These funds cannot be used to satisfy any claims made by creditors of ING.
Stable Value Option
ING Life Insurance and Annuity Company ("ILIAC") has issued unallocated group annuity contracts in connection with the Connecticut Stable Value Fund. These contracts guarantee your principal in the fund and a return of at least 3 percent interest per year. More than three-quarters of the assets in the Stable Value Fund are invested through a separate account, where they are insulated from claims of ING's creditors. This was done deliberately to protect investors in the fund.
The remaining quarter of the Stable Value Fund is held in the General Accounts of ILIAC and The Hartford Life Insurance Company. As to this portion of the Stable Value Fund, the respective guarantees on the annuity contracts issued by ING Life Insurance and Annuity Company and The Hartford are backed by each company's independently rated claims-paying ability.
In September 2008, ILIAC's financial strength was rated by the major independent rating entities as follows: Standard and Poor's (AA), Fitch (AA), and Moody's (Aa3). Additional information about ING's financial position is posted at www.CTdcp.com under "Financial Markets." The Hartford's current claims paying ratings is comparable to ING's.
Connecticut Insurance Guaranty Association
Our state also maintains a guaranty fund that would be used to pay claims of state residents if an insurer fails. Connecticut's guaranty program provides coverage for up to "$500,000 in present value as to any one participant [covered by an unallocated annuity contract] in a government retirement plan under sections 401, 403(b) or 457 of the U.S. Internal Revenue Code."
A detailed description of the program is available at www.ct.gov/cid/lib/cid/guarfund.pdf.
I trust this information addresses your concerns. Please e-mail any additional questions to email@example.com.
Very truly yours,
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