Vantagepoint Roth Payroll IRA

In addition to your employees’ pension plan, 457 Deferred Compensation Plan and/or 401(a) defined contribution plan, an Individual Retirement Account (IRA) is one of the best ways for your employees to save for retirement. ICMA-RC can help your employees save more for retirement by offering the Payroll Roth IRA. Your employees can make regular contributions to the Roth IRA conveniently through payroll deduction. The Roth IRA provides your employees with the opportunity of a lifetime to build retirement assets without ever owing any taxes on the earnings.

The Payroll Roth IRA offers your employees the following benefits:

• Dollar cost averaging through regular contributions
• Interest and earnings on contributions are always tax-deferred
• Earnings are tax-free at the time of withdrawal*
• Contributions are allowed after age 70½
• Investment flexibility through the Vantagepoint Funds and a variety of investment options from nationally known fund families
• Contributions can be withdrawn at any time without tax and penalty**

* Roth IRA investor must have held the Roth IRA account at least five years. Investor must also be age 59½ or using the money for a first-time home purchase (limited to $10,000 over the investor's lifetime) or the investor is disabled or deceased.

**provided that the investor’s aggregate distributions from all of their Roth IRAs do not exceed their aggregate Roth IRA contributions

The amount of money that your employees can contribute to a Roth IRA depends on three factors:

• Modified Adjusted Gross Income (MAGI)
• The year that the employee is contributing
• Whether the employee is 50 years old or over and entitled to make “catch-up” contributions (The amount of the "catch up" for Roth IRAs is capped at $1,000 for 2007 and 2008.)

The following chart outlines the provisions of the Roth IRA:

Provision	Roth IRA
Key tax advantage	Tax-free growth potential
Maximum annual contribution (2007)	$5,000 or earned income ($10,000 for some couples)
Eligibility	No age requirement; any individual with earned income within the allowable guidelines*: Elig. Married Single Full <$159,000 <$101,000 Partial $159,001–  $169,000 $101,001–  $116,000 None >$169,000 >$116,000 *Dollar figures represent Modified Adjusted Gross Income, on your 1040 tax form
Earnings grow tax-deferred	Yes
Earnings taxed upon withdrawal	No, if held five years, and you are 59½ or older, or if other rules are met
Contributions taxed upon withdrawal	No
Contributions deductible from income tax	No
Penalty-free withdrawals	Yes, if you are 59½ or older, or other rules are met.
Subject to minimum withdrawal requirement after age 70½	No
Contributions allowed after age 70½	Yes

To establish a Payroll Roth IRA program, please contact Client Services