TRADITIONAL IRA

• The annual contribution $4000 through 2007 and $5000 in 2008 and thereafter
• Contributions are fully tax-deductible (income limits apply)
• Option to invest in Traditional IRA certificate
• Distributions begin at age 70 ½
• Catch-up contributions –individuals age 50 and up can make additional catch-up contributions of $1,000 per year
• Excellent tool for retirement savings
• Investments grow on tax-deferred basis
• Contributions and earnings are taxed only upon withdrawal

ROTH IRA

• The annual contribution $4000 through 2007 and $5000 in 2008 and thereafter
• Contributions are not tax-deductible
• Option to invest in Roth IRA certificate
• Distributions are not required at age 70 ½
• Catch-up contributions –individuals age 50 and up can make additional catch-up contributions of $1,000 per year
• Excellent tool for retirement savings
• Contributions and earnings can be withdrawn tax-free

RE: Required Minimum Distribution Waived for 2009

            This letter is to notify that President Bush signed into law the Worker, Retiree and Employer Recovery Act (WREPA) on December 23, 2008. Section 201 of this legislation waives the 2009 required minimum distributions (RMDs) for IRAs. 

            Therefore no RMD is required for 2009.  Any individual who attains age 70 ½ in 2009 will not be required to take a first RMD by April 1, 2010, but the distribution for the 2010 calendar year must be taken by December 31, 2010.  Below please find some frequently asked questions to help you understand current change better:

Q1. If I don’t take a 2009 RMD, won’t I be required to pay a tax penalty?
            No. Under the Act, there is no RMD required for 2009, and no tax penalty will be assessed if you do not take your RMD. In a normal year, the Tax Code assesses a 50% excise tax on any required distribution that fails to be distributed. But 2009 will not be a normal year. No excise taxes will apply because there will be no required distributions in 2009.

Q2. I’ve been taking RMDs for years and I’ve grown to depend on them as a source of retirement income. Can I still take the distribution that I had planned on?
            Absolutely. Your access to your contract hasn’t changed. The only thing that’s changed is that you aren’t required to take a 2009 minimum distribution. If you would like to take a distribution anyway, you can certainly do that.

Q3. I currently have a systematic withdrawal set up on my contract. Will I still receive my payments?
            A systematic withdrawal is an automatic withdrawal that you take monthly, quarterly or annually. If there is currently a systematic RMD withdrawal set up on your contract, and you wish to keep it, there is nothing you need to do. The payment you receive will be based on the RMD calculation. However, you may elect to receive a systematic withdrawal in any amount that you request.

Q4. If I stop my payments, what will happen in 2010?
            Starting in 2010, your systematic payments will resume in accordance with your original instructions.

Q5. How do I stop my payments?
            If you wish to stop receiving the payments, please contact us.
In any case if you should have any further questions please contact your local branch for assistance.

Sincerely,