metlife pension resource center sm annuities | …...plan). employees must be 21 and have one year...

ANNUITIES | VARIABLE

L-22529-3

The MetLife Pension Resource CenterSM is ateam of full service sales consultants availableto provide you with:

• Plan Design• Prospecting• Regulatory Updates• Technical Assistance• Product Solutions• Investment Fund Analysis

One CityplaceHartford, CT 06103-3415

MetLife Pension Resource CenterSM

1300 Hall Boulevard, Bloomfield, CT 06002-2910

1/06

METLIFE PENSION RESOURCE CENTERSM

PROVIDE,design andWhether your new business is for astart-up plan or the takeover of anexisting plan, our full service sales consultants are there to discuss plantypes, provide design illustrationsand discuss investment productinformation as well as administrativecapabilities.401(k), Profit Sharing, SEP,

SIMPLE, Defined Benefit, Roth,

IRA, 403(b), 457(b), and 457(f) discuss.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoidIRS penalties. This document supports the promotion and marketing of insurance products. Youshould seek advice based on your particular circumstances from an independent tax advisor.

MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this documentis for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisers regarding your particular set of facts and circumstances.

0810-9980PRC9 L11085075(exp0410)(All States)(DC,GU,MP,PR,VI)© 2009 METLIFE, INC. PEANUTS © United Feature Syndicate, Inc.

1300 Hall BoulevardBloomfield, CT 06002-2910

phone:1-800-842-401(k)

XX%

Cert no. XXX-XXX-XXXX

Reference Guide

CONSULTand assist

2009 Qualified Plans

2009

SEP/IRA

Corporations, Sub-Chapter S, Self Employed, SoleProprietorships, Partnerships, Non-Profit (not eligible for salarydeferral).

Worked for employer during anyperiod of 3 of the last immediatelypreceding 5 years; however short.At least 21 years of age. $550 annual compensation.

No

25% of each employee’s compensation (maximum $49,000) ($245,000 salary cap).

Employee IRA – $5,000

$ 1,000 – Employee IRA$ 5,500 – (Existing SAR-SEP)

By tax-filing date plus extensions.

Employer – by tax-filing date plusextensions. Employee – on deferral basis.

Individual

No

Full & Immediate

10% tax penalty utilizing substan-tially equal payments, death, disability, medical expenses,exceeding 7.5% of AGI, or purchase of health insurance while employed.

No Tax Penalty

Required minimum distributions.(May remove aggregate total fromone account.)

Taxed as ordinary income.

One 60-day rollover per 12-monthperiod. Reported as distribution andreturned as a rollover contribution.

• Qualified Plan• 403(b) Plan• 457 Governmental Plan• SEP/IRA• IRA• Roth IRA1

1Only if the taxpayer’s AGI for the taxyear does not exceed $100,000, and thetaxpayer is not married filing separately.

Simple to establish and maintain. No annual IRS filingrequirements. Contributionsdeductible for employer.

SIMPLE/401(k)

Employers with no more than 100 employees including sole proprietors and non-profit entities (cannot maintain another qualifiedplan).

Employees must be 21 and have one year of service (typically 1,000 hours).

Employer – YesEmployee – No

Match deferrals $1 for $1 up to the first 3% of compensation (maximum match $7,350) or non-elective contribution of 2% on first$245,000.

$11,500 salary deferral limit underIRC Section 408(p).

$2,500

Oct. 1 for existing businesses. Assoon as administratively feasible forbusinesses established after Oct. 1.

Employer – by tax-filing date plusextensions. Employee – on deferral basis.

Employer/Trustee or plan mayallow individual direction.

Loans optionally available.

Full & Immediate

10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions are only allowed uponthe occurrence of a triggeringevent. (See “Eligible Rollovers”).

No Tax Penalty

Required minimum distributions atthe later age of 701/2 or separationof service (701/2 if 5% owner).


Must have triggering event. (e.g., plan termination, death or separation from service, disability,age 591/2).

• Qualified Plan• 403(b) Plan• 457 Governmental Plan• SEP/IRA• IRA

Contributions deductible foremployer. No discrimination testing. Not subject to top-heavyrules. Some funding responsibilitywith employees. Deferral reduces taxable income to employee.

Profit Sharing

Corporations, Sub-Chapter S, Self Employed, Sole Proprietorships,Partnerships, Non-Profit

2 years of service with employer.1,000 hours per year. At least 21years of age.

No

PS-25% of participating payroll.Allocation limited to lesser of 100% of Comp. or $49,000 per participant.

No elective deferrals. After taxvoluntary employee contributionsmay be allowed in accordance with the plan provisions.

Not Available

By fiscal year-end (12/31 for calendar-year plan).


Employer/Trustee or plan may allow individual direction.


3 vesting schedules: immediate, cliff, graded 10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions may be allowed in accordance with the plan provisions, after a fixed number of years, reaching a stated age, or a distributable event.

No Tax Penalty

Required minimum distributions atthe later age of 701/2 or separationof service (701/2 if 5% owner). Maynot aggregate total. Each plan separate.


May be allowed in accordance withthe plan provisions, after a fixed num-ber of years, reaching a stated age, ora distributable event.


Contributions discretionary.Flexibility in plan design. Loans may be allowed. Contributions, plan expenses may be deductibleby employer. Vesting schedules.

Money Purchase



Yes

MP-25% of participating payroll.Allocation limited to lesser of 100% of Comp. or $49,000 per participant.

No elective deferrals. After taxvoluntary employee contributionsmay be allowed in accordancewith the plan provisions.

Not Available





3 vesting schedules: immediate, cliff, graded 10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions are only allowed uponthe occurrence of a triggeringevent. (See “Eligible Rollovers”).

No Tax Penalty



Must have triggering event. (e.g., plan termination, death orseparation from service, disability,age 591/2).


Contributions fixed. Planexpenses may be deductible byemployer. Vesting schedules.

401(k)



No

The employer’s current year deduction is limited to 25% of compensation paid to all eligibleparticipants. Allocation limited tolesser of 100% of Comp. or $49,000per participant.

$16,500 salary deferral limit underIRC Section 402(g).

$5,500

By fiscal year-end (12/31for calendar-year plan).




3 vesting schedules: immediate, cliff, graded 10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions are only allowed uponthe occurrence of a triggeringevent. (See “Eligible Rollovers”).

No Tax Penalty



Must have triggering event. (e.g., plan termination, death orseparation from service, disability,age 591/2).


Flexibility in plan design; loans maybe allowed. Contributions, planexpenses may be deductible byemployer. Funding responsibilitywith employees. Deferred amountreduces employee’s taxableincome. Vesting schedules.

Defined Benefit



Yes

Based on actuarial assumptions(i.e., age, compensation, etc.)($195,000 Annual Benefit Cap).

No elective deferrals. After taxvoluntary employee contributionsmay be allowed in accordance with the plan provisions.

Not Available



Employer/Trustee


3 vesting schedules: immediate, cliff, graded 10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions are only allowed upon the occurrence of a triggeringevent. (See “Eligible Rollovers”).

No Tax Penalty

Required minimum distributions at thelater age of 701/2 or separation of service (701/2 if 5% owner). Maynot aggregate total. Each plan separate.


Must have triggering event (e.g., plan termination, death or separation from service, disability,age 591/2).


Contribution levels may be substantially higher than othertypes of retirement plans. Favorsolder, highly compensated employees. Vesting schedules.

Roth IRA

Individual with earned income.

Must have modified adjusted gross income of < $120,000 for single filers and < $176,000 for joint filers.

No

N/A

100% of earned income up to $5,000 per individual to all IRAs.

$1,000

4/15/2009 for 2008

4/15/2009 for 2008

Individual

No

Full & Immediate

10% tax penalty on earnings unlesswithdrawal is for death, disability;first-time homebuyer ($10,000 limitin aggregate to all IRAs); substan-tially equal periodic payments; certain major medical expenses;certain long-term unemploymentexpenses.

No tax penalty for “qualified distri-butions.” A distribution is qualified ifthe Roth IRA has been establishedfor at least 5 years and one of thefollowing events occurs: attainmentof age 591/2, disability, death or afirst-time home purchase. In any ofthese cases, the earnings with-drawn are tax-free.No required minimum distributions at any age.

Principal and earnings withdrawnare tax-free.

Roth IRA to Roth IRA - rules followthe Traditional IRA rollover rules.

• Roth IRA

Tax-free growth.

Traditional IRA

Individual with earned income.

Must have earned income and be under the age of 701/2.

No

N/A

100% of earned income up to $5,000 per individual to all IRAs.

$1,000

4/15/2009 for 2008

4/15/2009 for 2008

Individual

No

Full & Immediate

10% tax penalty unless the distributionis because of death, disability, a quali-fying rollover; a direct transfer, thetimely withdrawal of an excess contri-bution, certain qualified medical oreducational expenses, and a first-time home purchase ($10,000 limit inaggregate to all IRAs). Waived if the distribution is part of a series of substantially equal periodic payments made over the individual’s life expectancy.No Tax Penalty

Required minimum distributions aslate as April 1 following the year in which the individual reaches age 701/2.


Traditional IRA to Traditional IRA.Traditional IRA to Roth IRA; pre-taxdollars are taxed as ordinary income.

• Qualified Plan• 403(b) Plan• 457 Governmental Plan• SEP/IRA• IRA • Roth IRA1

1 Only if the taxpayer’s AGI for the tax year does not exceed $100,000,and the taxpayer is not married filing separately.

Tax-deferred growth.

SIMPLE IRA

Employers with 100 or feweremployees who earned $5,000 or more during prior calendar year(cannot maintain another retirementplan).

$5,000 for compensation for any 2 preceding years and is expectedto earn $5,000 in current years.

Employer – YesEmployee – No

Match deferral $1 for $1 up to 3% of compensation or 2% (subject to $245,000 salary cap)non-elective contribution.

100% of earned income up to $11,500.

$2,500

Oct. 1 for existing businesses. Assoon as administratively feasible forbusinesses established after Oct. 1.

Employer – by tax-filing date plusextensions. Employee – on a deferral basis.

Individual

No

Full & Immediate

10% tax penalty unless the distributionis because of death, disability, a quali-fying rollover; a direct transfer, thetimely withdrawal of an excess contribution, certain qualified medicalor educational expenses, and first-time home purchases ($10,000 limit inaggregate to all IRAs). Waived if the distribution is part of a series of substantially equal periodic payments made over the individual’s life expectancy.No Tax Penalty

Required minimum distributions aslate as April 1 following the year in which the individual reaches age 701/2.


Only from one SIMPLEIRA to another SIMPLE IRA, 403(b), 457,SEP/IRA, Roth IRA, or a Qualified Planand Traditional IRA after 2 years ofparticipation.• Qualified Plan1

• SIMPLE IRA• 403(b) Plan• 457 Governmental Plan• SEP/IRA• IRA1

• Roth IRA21 Only after the individual has partici-

pated in the SIMPLE plan for 2 years.2 Only if the taxpayer’s AGI for the tax

year does not exceed $100,000, andthe taxpayer is not married filing separately.

Employer – contributions aredeductible. Employee – tax deferral reducestaxable income.

403(b) Non-ERISA Title I Plans with only Salary Deferral Contributions

Non-profit organizations exemptunder IRC 501(c)(3) (e.g., churches,hospitals, and schools).

The option to participate generallymust be offered to all eligible employees (except certain studentemployees and employees who work less than 20 hours per week).

No

Not Applicable

100% of compensation or $16,500,whichever is less. Special catch-upprovisions may increase the contribution limit.

$5,500

The plan may be established anytime during the calendar year.

Salary deferral ongoing from payroll.

Individual


Full & Immediate

10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10%owner), death, or disability.Distributions are only allowed uponthe occurrence of a triggering event.(See “Eligible Rollovers”).

No Tax Penalty

Required minimum distributions, by April 1 of calendar year in whichparticipant becomes age 701/2, orcalendar year in which the individualretires.


Must have triggering event (e.g., death, separation from service, disability, age 591/2).


Deferred amount reduce employee’s taxable income. Specialelections may further increase theamounts an employee can defer.Earnings are tax-deferred.Contribution limits are greater than IRAs. Loans may be allowed.

Roth 401(k)



No

The employer’s current year deduction is limited to 25% of compensation paid to all eligibleparticipants. Allocation limited tolesser of 100% of Comp. or $49,000per participant.

$16,500 salary deferral limit underIRC Section 402(g).

$5,500





3 vesting schedules: immediate, cliff, graded10% tax penalty unless over 55 andseparated from service (except ifself-employed or more than 10%owner), death or disability.Distributions are only allowed upon the occurrence of a triggeringevent. (See “Eligible Rollovers”.)

No tax penalty for “qualified distri-butions.” A distribution is qualified ifthe distribution is made no earlierthan 5 years after contributionswere made to the Roth account andone of the following events occurs:attainment of age 591/2, or older,death, or disability. In any of thesecases, the earnings withdrawn aretax-free.

Yes – Roth 401(k) is subject to mini-mum required distribution rules.However, prior to age 701/2, a partici-pant may avoid the requirement tomake lifetime minimum distributionsby rolling to a Roth IRA any portionof the Roth 401(k) account that is aneligible rollover distribution.


Must have triggering event (e.g., plan termination, death or separation from service, disability,age 591/2).

• Roth IRA• Roth 403(b)• Roth 401(k)

• Tax-free growth• No income limits to qualify for a

Roth account, unlike a Roth IRA • Higher contribution and catch-up

limits than a Roth IRA

Question/Topic

Who Can Establish?

Maximum EligibilityRequirements

Are Contributions Mandatory?

Contribution Limits:Employer

Contribution Limits:Individual

Catch-Up contributions for workers age 50 and older

When must the plan be established?

When must contributions be made?

Who directs investments?

Are loans available?

Vesting

Distributions before age 591/2

Distributions for ages 591/2-701/2

Distributions after age 701/2

How are distributionstaxed?

Eligible Rollovers

Portability: Rollovers among plans

Advantages

Individual(k)

Corporations, Sub-Chapter S, Self Employed,Sole Proprietorships –“Owner(s) Only,”Partnerships, LLC’s,Businesses with “Excludable” Common-Law Employees

None

None

The employer’s current year deduction is limited to 25% of compensation paid to all eligible participants. Allocation limited tolesser of 100% of Comp. or $49,000 per participant.

$16,500 salary deferral limit under IRC Section 402(g).

$5,500


Unincorporated Businesses Employer/Employee ContributionsBy tax-filing date plus extensions

Incorporated Businesses Employer ContributionsBy tax-filing date plus extensions

Incorporated Businesses Employee ContributionsNo later than the 15th business day of the month following the month inwhich the deferrals are withheld.

Individual


Full & Immediate

10% penalty unless over 55 and separated from service (except if self-employed or more than 10%owner), death, or disability.Distributions are only allowed uponthe occurrence of a triggering event. (See “Eligible Rollovers”).

No Tax Penalty

Required minimum distributions at the later age 701/2 or separation of service (701/2 if 5% owner). May not aggregate total. Each plan separate.


Must have triggering event (e.g., plan termination, death or separation from service, disability, age 591/2).


Generous contribution limits.Contribution flexibility. Immediate vesting. Simplified plan administration.No annual Dept. of Labor 5500 reportingof plans below $250,000 of assets.Access to loans. Asset consolidation.

457(f) Ineligible PlanPlans with Employer Contributions

Same as a 457(b) but usually usedfor tax-exempt employers; rarelyused by governmental employers.

Eligibility for a select group of management or highly compensated employees.

No

No limit

No limit

Not applicable


Any time

Employer/Trustee directed.However, plans may permit participant direction.

No

Any vesting schedule

Distributions must be made on any monies that become vested.No tax penalty applies to any distribution.

Same as above

No required minimum distributions

Not allowed

Not allowed

No limit on contributions

Employers may allow contributionsfor only certain key employees.

457(b) Eligible PlanPlans with onlySalary Deferral Contributions

Governmental employers, public utility companies, elementary & secondary schools, public universities & colleges, city, county & state hospitals, certain non-governmental tax-exempt employers.Governmental – None Tax-Exempt – Eligibility for a selectgroup of management or highlycompensated employees, except if the group is church-related.

No

• Employer contributions are rare. • Employer contributions offset

employee deferrals. • Employer & Employee contribu -

tions combined cannot exceed100% of compensation or $16,500,whichever is less.

100% of compensation or $16,500,whichever is less. Special catch-upprovisions may increase the contribution limit. However, pleasenote that employer contributions offset employee deferrals.

Governmental – $5,500 Tax-Exempt – Not available.

A special catch-up provision for participants within 3 years of normal retirement age may apply.



Individual

Governmental – YesTax-Exempt - No

Any vesting schedule

Severance from employment,unforeseeable emergencies, small inactive accounts. Also, plantermination and QDRO’s (if stated inthe plan language). No tax penaltyapplies to any distribution.

Same as above

Required minimum distributions, by April 1 of calendar year in whichparticipant becomes age 701/2 or calendar year in which the individualretires.


Must have triggering event (e.g., death, separation from service, disability, age 591/2).Tax-Exempt – No

Applies to Governmental 457s only:• Qualified Plan*• 403(b) Plan• 457 Governmental Plan• SEP/IRA• IRA (except a SIMPLE IRA)* Except to a SIMPLE 401(k)

If an Employer offers a 403(b) or401(k) plan in addition to the 457(b)plan, an employee can defer themaximum to both plans.

Employers may allow contributionsfor only certain key employees.

Roth 403(b) ERISA Title IPlans with Employer Contributions


Minimum participation, minimum coverage and nondiscriminationrequirements may apply.

Generally no, but may be designed with Employer mandatorycontributions. The employer’s contributions (including elective deferrals) to an employee’s account should not be more than the lesser of $49,000, or 100% of the employee’s compensation for the year.


$5,500

The plan may be established any time during the calendar year.

Employer – The plan may be fundedany time during the calendar year.Employee – Salary deferral ongoingfrom payroll.

Employer/Trustee may allowindividual direction.


3 vesting schedules: immediate, cliff, graded10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10%owner), death, or disability.Distributions are only allowed uponthe occurrence of a triggering event.(See “Eligible Rollovers”).

No tax penalty for “qualified distribu-tions.” A distribution is qualified if thedistribution is made no earlier than 5years after contributions were madeto the Roth account and one of thefollowing events occurs: attainmentof age 591/2 or older, death, or disabil-ity. In any of these cases, the earn-ings withdrawn are tax-free.

Yes – Roth 403(b) is subject to mini-mum required distribution rules.However, prior to age 701/2, a partici-pant may avoid the requirement tomake lifetime minimum distributionsby rolling to a Roth IRA any portionof the Roth 403(b) account that is aneligible rollover distribution.




• Tax-free growth• No income limits to qualify for a

Roth account, unlike a Roth IRA• Higher contribution and catch-up

limits than a Roth IRA

Roth 403(b) Non-ERISA Title I Plans with onlySalary Deferral Contribution


The option to participate generallymust be offered to all eligible employees (except certain studentemployees and employees whowork less than 20 hours per week).

No

Not Applicable

100% of compensation or $16,500whichever is less. Special catch-upprovisions may increase the contribution limit.

$5,500



Individual


Full & Immediate

10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10%owner), death, or disability.Distributions are only allowed uponthe occurrence of a triggering event.(See “Eligible Rollovers”).

No tax penalty for “qualified distribu-tions.” A distribution is qualified if thedistribution is made no earlier than 5years after contributions were madeto the Roth account and one of thefollowing events occurs: attainmentof age 591/2 or older, death, or disabil-ity. In any of these cases, the earn-ings withdrawn are tax-free.

Yes – Roth 403(b) is subject to mini-mum required distribution rules.However, prior to age 701/2, a partici-pant may avoid the requirement tomake lifetime minimum distributionsby rolling to a Roth IRA any portionof the Roth 403(b) account that is aneligible rollover distribution.




• Tax-free growth•No income limits to qualify for a Roth account, unlike a Roth IRA

•Higher contribution and catch-uplimits than a Roth IRA

403(b) ERISA Title I Plans with Employer Contributions


Minimum participation, minimumcoverage and nondiscriminationrequirements may apply.

Generally no, but may be designed with Employer mandatorycontributions.The employer’s contributions (including elective deferrals) to an employee’s account should notbe more than the lesser of $49,000,or 100% of the employee’s compensation for the year.


$5,500


Employer – The plan may be fundedany time during the calendar year.Employee – Salary deferral ongoingfrom payroll.



3 vesting schedules: immediate, cliff, graded10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10%owner), death, or disability.Distributions are only allowed uponthe occurrence of a triggering event.(See “Eligible Rollovers”).

No Tax Penalty

Required minimum distributions, by April 1 of calendar year in whichparticipant becomes age 701/2, or calendar year in which the individualretires.




Deferred amount reduces employee’s taxable income. Specialelections may further increase theamounts an employee can defer.Earnings are tax-deferred.Contribution limits are greater than IRAs. Loans may be allowed.

Summary Comparison of Qualified Plans, Roths, IRAs, 403(b)s & 457s (2009 limitations included herein; subject to change annually).

metlife pension resource center sm annuities | …...plan). employees must be 21 and have one year...

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