What is the supplemental retirement plan?
The Plan permits you to voluntarily establish your own Individual Retirement Account (IRA: Traditional, Roth and Education) and/or Non-Qualified Deferred Annuity Account (interest accumulates on a tax-deferred basis). Once received, your contributions are placed with the Lincoln National Life Insurance Company at the then prevailing rate. As a participant you will receive quarterly statements
Who is eligible?
All UPMA members, their respective spouses, and the following family members: grandparents, parents, children and grandchildren over age 21 and their respective spouses are eligible to participate in this Plan. Call IPC for the family member enrollment form
What is the minimum contribution and cost to participate in this supplemental retirement plan
There is no mandatory minimum contribution amount, and there are no administrative fees.
Lincoln National Life’s financial strength: A+ by A.M. Best which ranked Lincoln National Life “superior”, as second highest of sixteen. (These ratings reflect claims paying ability, but are not a guarantee of future performance.)
All 2017 contributions will receive no less than 1.5% guaranteed through December 31, 2017. For contributions credited during 2017, an interest rate will be declared each quarter and contributions received and credited during a particular quarter will receive that interest rate until December 31, 2017. For 2018, a guaranteed rate will be declared each quarter on 2017 contributions, but can be no less than 1.5%. You begin to earn interest upon receipt of your contribution by Lincoln Life, which will be forwarded to the custodian no later than 7 working days following deposit.
You may request withdrawal forms from the Plan Administrator (IPC). Withdrawals are processed on the fifteenth and last calendar day of each month for forms received 5 business days prior to the withdrawal date.
IRS penalties for premature distribution:
Generally, distributions received prior to age 59 1/2 that are not due to death, disability, transfer or rollover are subject to a 10% IRS Penalty Tax as follows:
1) Traditional IRA – on the full amount withdrawn;
2) Non-Qualified Tax-Deferred Annuity – on interest earnings only;
3) Some withdrawals may be penalty-free, and some may even be tax-free. However, the combination of several factors, including your age, and whether you have a Roth account that has been open at least five tax years, the purpose of the withdrawal and whether the Roth IRA was converted from a Traditional IRA affect the taxability. Consult your tax advisor for more details.
This charge will not be assessed if the Participant is (1) 59 1/2 and retired, or (2) disabled, or (3) deceased. Otherwise, surrender charges are assessed as follows:
|Years of Participation||Surrender Charge|
|10 or more||0%|
Principal is guaranteed by the funding carrier. Guarantee is based on continued claims paying ability of the insurer or the ability of the company to meet its financial obligations.
Enhanced Plan Feature:
You may withdraw up to 50% of your accumulated interest earnings once per year without surrender charge.
THE FIRST QUARTER RATE IS 1.50% ON ALL CONTRIBUTIONS RECEIVED BY MARCH 23, 2017. CALL THE PLAN ADMINISTRATOR FOR SUBSEQUENT QUARTERLY RATES. THIS PLAN HAS A MINIMUM GUARANTEE OF 1.50% * THROUGH DECEMBER 31, 2017.
Minimum CONTRACTUAL Guarantee for the Supplemental Retirement Plan is 1.50%.
Stated interest rates are the effective annual rate. Daily compounding rates are used to equal the rate. Lincoln Life form number is 20880. *on contributions credited during 2017.
Individual Retirement Account (IRA)
Participants may choose from a traditional IRA or Roth IRA.
The maximum contribution amount is limited to 100% of earned income up to $11,000 for joint filers (up to $5,500 each), $5,500 for singles. If you turn 50 or older in 2017, you may contribute up to $6,500. This is a combined maximum for all Traditional and Roth IRAs you hold.
TRADITIONAL IRA – All or part of your contributions may be deductible. The determining factors for deductibility are the income restrictions and eligibility to participate in an employer-sponsored qualified retirement plan.
ROTH IRA – Contributions are nondeductible. Earnings, however, are tax-free provided the account has been open at least five tax years and you are at least 59 1/2 when you begin to withdraw. The availability of this type of IRA is phased out according to your AGI: for joint filers, $186,000 to $196,000; for single filers, $118,000 to $133,000.
IRA contributions can be made for tax year 2016 until April 15, 2017 or until your 2016 tax return is filed (excluding filing extensions). If any portion of your Traditional IRA contribution is nondeductible, your must file Form 8606 with your tax return. IPC can provide more details on deductibility on request.
Under the Supplemental Retirement Plan you may roll over your accumulated balance in a qualified retirement plan into a Traditional IRA without tax consequences. You may also transfer or roll over a Traditional IRA into another Traditional IRA, or a Roth IRA. You may transfer a Roth IRA to a new Roth IRA. You should be certain that you understand the tax consequences before executing any transfer.
You must cease making contributions to Traditional IRAs in the year in which you reach age 70 1/2. Minimum required distributions must begin by April 1 of the year following the year in which you attain age 70 1/2. For Roth IRAs there is no age limit for contributions or withdrawals.
Non-Qualified Tax-Deferred Annuity
If you wish to make contributions larger than those permitted under IRA regulations, or if you are not eligible to establish a deductible IRA, you may want to participate in the Non- Qualified Deferred Annuity portion of the Supplemental Retirement Plan and have all of the advantages of this tax- deferred annuity plan for your retirement planning.
There are no limitations on contributions. You may contribute as much as you wish at any time.
Contributions are not tax deductible. However, interest earnings will accumulate on a tax-deferred basis, that is, no taxes will be assessed until earnings are withdrawn. Withdrawals are processed from interest first. (IRS Regulations).
IRS reporting requirements do not oblige you to indicate contributions to or current interest earnings on a Non- Qualified Deferred Annuity on your Form 1040 (done at time of withdrawal).
No maximum age limitations for contributions or withdrawals.
Call the Supplemental Retirement Plan Administrator (IPC): (800) 368-3515