Title: IN4 Deferred Compensation 457 Plan for School Board Members

Recommendation:
I recommend that the School Board adopt a new 457 Plan to allow a change in custodian to Colonial Bank and to comply with the new tax code.

Description:

•This 457 Deferred Compensation Plan will allow School Board Members to tax defer up to $14,000 of their School Board salary on an annual basis and if over fifty years of age another $4,000 dollars can be added for a total of $18,000 dollars.  Funds would be transmitted to GWN Marketing, the broker/dealer for our registered representatives, Buttelman & Strehlow    Financial Group, Inc., for investment in the individual client's account.

•This plan changes the custodian from Chase Manhattan to Colonial Bank, which allows a much broader choice of mutual funds and waives the administrative fee.

•This new plan incorporates the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA law) which allows 457 Plans to increase annual deferred amounts, expand portability of plans and repeals the maximum exclusion allowance.

• The IRS has ruled that School Board Members are not eligible to participate in existing 403(b) deferred compensation plans, but may participate in 457 Plans.

• Colonial Bank is approved by the IRS to offer 457 Plans.

Financial Impact:
There is no financial impact to the District.

For Additional Information, contact:
Joseph M. Moore (moorej@palmbeach.k12.fl.us) \Dianne L. Howard