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Are you inundated with magazine subscriptions?Do you feel like you’re being buried in paper?Would you like to read CRTA Contact online?Each issue of CRTA Contact is available onthe CRTA Web site at www.calrta.org in the“Members Only” section … and it’s availableonline before it reaches your mailbox! All youneed is your identification number (MemberID), located above your name on the addressportion of this issue. Your password will beyour last name. If you’d like to be removedfrom the mailing list and read all your issuesonline, please complete the online form atwww.calrta.org.Send us your “Letters to the Editor”CRTA wants to hear from you, the members! Weencourage “Letters to the Editor” and will printas many as we have room for. Send your letter,limited to 100 words or less, to the CRTA BusinessOffice at 800 Howe Avenue, #370, Sacramento,CA 95825; via e-mail to admin@calrta.org; or via fax to 916-923-1910.A member may have one letter published in a12-month period. Name and address may bewithheld by request, but anonymous letters willbe discarded.| JUNE 200810www.calrta.org
The US Treasury Department and the IRS releasedfinal regulations governing 403 (b) accounts on July23, 2007, and the new rules for tax-free exchangesbecame effective September 24, 2007. School Districts mustnow have Plan Documents governing retirement accountscontributed to by educators while working. These rules applyto retirees too and are under the jurisdiction of the member’slast employer. Some districts have sent out correspondence tocurrent employees but may have overlooked retirees. Not alldistricts have taken action yet as they try to sort out the newrules. The problem is if the districts wait too long, individualsmay not have time to react in a knowledgeable manner andmay end up paying unnecessary taxes.The final regulations makeit clear school districtshave new sets of responsibilitiesas do insurancecompanies and custodians.With responsibilitycome rules, regulationsand control. Technically,the individual no longercontrols his/her accounts.New 403 (b) Regulationsand How They Affect Members With TSAsThe individual can nolonger control investment options and no longer has theability to transfer retirement accounts to new investmentswithout school district approval. This results in a potentialloss of liquidity and privacy not only for the member butalso the member’s beneficiaries. The beneficiary must operatethrough the employer and the company involved.By Reed Montgomery, Western World Marketing“The individual can no longercontrol investment optionsand no longer has the abilityto transfer retirement accountsto new investments withoutschool district approval.”Each category has its own set of complex rules that must befollowed to the letter. Without prior knowledge on the part ofthe member the retirement account could be taxable at up to40 percent to the beneficiary upon the member’s death (Thetaxation could be as high as 85 percent if estate taxes are involved).This part of the code is known as “Income in Respectof a Decedent.”Further, any accounts that are not in compliance by January1, 2009, will be disqualified and taxed in the year of disqualification;i.e. in 2009.There have been reports that some Plan Administrators (organizationsthat process TSAsfor the school districts) aretaking the position thateven withdrawals mustreceive prior approval. Thismeans instead of contactingyour TSA company directlywhen you want to take withdrawalsfrom your account,you must go through theadministrator and followwhatever rules they havedecided are necessary.There are solutions to the new set of rules that will protect themember and the beneficiary. The issues are complex and willdiffer based upon individual situations.The best approach is to get advice from a financial adviserfamiliar with the new regulations.There are three categories of TSA accounts:1. Accounts issued after December 31, 2004, andbefore January 1, 2009, with no current contributions2. Contracts issued prior to January 1, 2005, with nosubsequent contributions3. Pre-January “Orphan” accounts 7 Section 90-24transfers prior to September 24, 2007www.calrta.orgCRTA utilizes Western World Marketing as its’ Preferred Providerin the area of financial counseling. Western World Marketingis making speakers available at CRTA meetings or luncheonsto explain these changes and offer solutions to manyof the problems created by these new rules.If any divisions are interested in having a speaker at anyCRTA functions, please call Western World’s main office at800-323-4032 to reserve a program speaker.| CRTA CONTACT11
Page 2 and 3: MissionCore Purpose: To enhance and
Page 4 and 5: Legislative UpdateBy David L. Walra
Page 6 and 7: Pension WatchCRTA Helps Defeat Inve
Page 8 and 9: - The Scoop -News for California’
Page 12 and 13: Is Shingles in Your Future?By Miche
Page 14 and 15: Board of Directors Meeting SummaryB
Page 16 and 17: Continued from page 5AB 2910 (Huffm
Page 18 and 19: | JUNE 200818www.calrta.org
Page 20: 800 Howe Avenue, Suite 370Sacrament

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