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HomeMy WebLinkAboutDeferred CompPEBSCO of New York Deferred Compensation Plan Administrator 120 Linden Oaks, Suite 100 Rochester, NY 14625-2894 (716) 381-7080 1-800-654-9805 FAX (716) 248-0238 RE: DEFERRED COMPENSATION BID SPECIFICATIONS Bid Specifications include the following: 1. Questionnaire 2. Rules & Regulations 3, Model Plan When you receive a"Request" add a cover letter if you like (optional) and simply address one of the (10) packets, seal it and mail. ffyou need additional sets please advise. Thanks. Sharon Neverle~, ~/~ Administrative~'an~ ~ ~- f Securities offered through Nationwide Investment Services Corporation I Member, NASD One Salem Green, Suite 410 * Salem, MA 01970 * (508) 741-0850 A Proposal to Continue to Provide a Deferred Compensation Plan for the Submitted by: Mr. Zachary Karas Manager Hatrfotrl Life Insurance Company 55 Farmington Avenue Hartfora~ CT06105 Telephone: 860520-1600 Ext. 3050 Toll Free: 800-243.5868 Fax: 860-520-2603 Hartford Life PUBLI('~ Proposal to Provide a Deferred Compensation Program For the Town of Southold, New York .,New York State Deferred Compensation Plan /~Two Tower Center PO Box 1063 East Brunswick Nil 08816-1063 1-800-422-8463 www. nysdcp.com RECEIVED 'JUL ! § 1996 Southokl Tow. Clerk July 14, 1998 Elizabeth A Neville, Town Clerk Town of Southold 53095 Main Road P.O. Box 1179 Southold, New York 11971-0959 Dear Ms. Neville: The Town of Southold recently advertised in the New York State Register in reference to a Request for Proposal for services in connection with a deferred compensation program. As a public employer in New York State, the Town of Southold has the option of participating in the New York State Deferred Compensation Plan. Our records indicate that the Town of Southold adopted the Plan in 1985, but none of your employees have ever participated in the Plan. If you would like to begin participating in the Plan, we can help you get started. There are over 400 local public employers who have adopted the Plan. In our capacity as the Administrative Service Agency of the Plan, we have assisted each of these localities in implementing the Plan. The Plan provides you and your employees various services including: · High quality investment options including mutual funds fi.om thirteen fund families, · On-going support of full-time dedicated field representatives, · A toll-flee customer service HELPLINE to work with both you and your employees in their enrollment and service needs, · 24-hour access to basic account information through the Plan's Automated Voice Response Unit, and · A Plan Web site giving participants access to information about the Plan or their own Plan Account. There is no cost to the Town of Southold for offering the New York State Deferral Compensation Plan to its employees. The only administrative activity you will be involved with is processing payroll contributions to the Plan and forwarding instructions each pay period. We take care of the rest. The accompanying information explains the services and products which are provided for the New York State Deferred Compensation Plan. We have enclosed six (6) copies of this material, as well as the Administrative Guidelines and a sample Enrollment Kit which was developed to provide each employee with em'ollment instructions. Once you have had an opportunity to review this information, please feel free to contact Diane Liga, Marketing Manager, at 800-422-8463 ext. 2334 if you have any questions or would like additional information about participating in the Plan. ~on~'d ~, State Plan Director New York State Deferred Compensation Plan ]New York State Deferred Compensation Plan These administrative guidelines have been developed by the Administrative Service Agency for the New York State Deferred Compensation Plan. The purpose of these guidelines is to ensure that your participation in the Plan is thorough, efficient, and in compliance with Internal Revenue Code Section 457 and the New York State Deferred Compensation Rules and Regulations. We are prepared to respond to your administrative questions and concerns as well as familiarize you with the Administrative requirements of the State's Plan. We ask that you complete the enclosed Administrative Checklist and return the completed form in the enclosed envelope. If you would like assistance in completing the checklist or have any immediate questions, please feel free to call us at 1-800-422-8463. EMPLOYEE ENROLLMENT Employees participating in the Deferred Compensation Plan are required to complete Plan enrollment forms. These forms have been approved by the New York State Deferred Compensation Board and are the only permissible forms used for enrollment. Enrollment Kits are obtainable by calling our HELPLINE at 1-800-422-8463. Subsequent requests for changes to existing Plan Accounts should also be directed to the HELPLINE. PAYROLL DEDUCTION TRANSMITTAL Once employees are enrolled, we will provide Participation Authorization Cards to the Employer prior to the date regular payroll deductions are to commence. The cards will include the participant's name, social security number, and percent of deferral. Subsequent cards will only be provided when deductions are changed from what was previously submitted. Deferred Compensation deductions for supplemental pays should be based on the percentages utilized on the regular payroll immediately prior to the supplemental pay. All Participation Authorization Cards will be forwarded to the Employer in as timely a fashion as required by the Employer. In order to assure timely receipt of all cards for each payroll, we ask that you please indicate on the attached checklist the number of days lead time required. In addition, please provide us with a copy of your payroll schedule. -~8-10-140 1 MS202-O306pe. k 3.98 PAYROLL DEDUCTIONS All Deferred Compensation deductions should be based on a percentage of salary as opposed to a flat dollar amount. Flat dollar deductions should be considered only in the evem that the Employer's payroll system cannot process a percentage deduction. Basing deductions on a percentage of salary is also more beneficial for your employees. As their salary grows, so will their deferrals to the Plan, and it will happen without requiring them to fill out a new Participation Authorization Card. All payroll deductions are to be made in accordance with the instructions reflected on the Participation Authorization Cards your employees fill out. Since payroll deduction changes must be made in writing by all participating employees through the Plan's Administrative Service Agency, all requests for deduction changes received by the Employer must be directed to them before any changes are made to the Employer's payroll. It is their responsibility to secure all required paperwork and participant signatures. They will then submit a new card to the Employer for any deduction change. Once payroll deductions have been made, the Employer is expected to provide deduction information to the Administrative Service Agency, which must include the participating employee's name, social security number, dollars to be remitted, and any additional identifiers as required by the Employer. For employers wiring the money deducted for its participants, this data may be sent to the Plan's Administrative Service Agency via magnetic tape, diskette, hard copy, or direct transmission to the New York State Deferred Compensation Plan, Two Tower Center, P.O. Box 1063, East Brunswick, New Jersey 08816-1063, Attention: Deferred Compensation Contribution Processing Unit. For employers submitting a check for deductions to the Plan, deduction information should be mailed, with the check, directly to the address listed on page 3. While receipt of hard copy alone is acceptable, due to processing time requirements imposed, a tape and hard copy output must be created by an Employer who has twenty-five (25) or more participating employees. We ask that all tapes or diskettes be created per the attached tape format. Your unique case number will be assigned as soon as all of the required documents and agreements have been executed. We request that the Employer provide a test tape or diskette no later than two (2) weeks prior to the first deduction date to safeguard against processing problems. In the event that you have the ability to transmit data electronically, a test mn is also required. All tapes and diskettes should be accompanied by a detail hard copy which totals the actual dollars remitted. All tapes and/or hard copies must be received not later than the actual pay day. Upon completion of processing the payroll deduction data, the Employer will be provided with a detailed print-out of that pay period's transactions. #98-10-140 2 MS202.03061~k 3.98 SYSTEMS REQUIREMENTS Defen'~ Compensation deductions reduce gross pay. This adjusted gross pay is then used to calculate Federal and State Income Tax withholding amounts. However, FICA contributions and]or employee pension contributions are calculated on the unadjusted gross pay. Par*Scipants in a Deferred Compensation Plan are allowed to contribute the lesser of 25% of year-to-date earrings, or $8,000.00 per year. In an attempt to alleviate the problem of overfunding by Plan members, the Employer is required to modify its payroll program to pe~m~t an ongoing comparison of year-to-date deductions to year-to-date eaxnings. Deductions should be reduced or suspended for the participant who has reached the maximum contribution level. Additionally, the Employer must maintain the ability to override this limitation on an individual fiat dollar basis, up to a maximum of $15,000.00 per year, to enable an eligible employee to exercise the permitted "catch-up" provision in the last three (3) years prior to retirement. MOVEMENT OF MONIES Whenever possible, it is recommended that your payroll monies be wire transferred to the custodial account at Chase Manhattan Bank. This is the quickest method of moving funds and will help ensure the prompt investment of contributions. A sample containing the necessary information is enclosed. If a check is the only available method of payment, it must be submitted as follows: o Make payable to: New York State Deferred Compensation Plan o Include your subease number and paydate of the remittance on your check o Submitted to: New York State Deferred Compensation Plan P.O. Box 5409, GPO New York, New York 10087-5409 Regardless of the method of payment, the money must be received in the custodial account no later than the actual pay date to assure timely investment of the remittance. Once the money has been received and the deduction information processed, we will issue investment instructions to Chase Manhattan Bank. Investment instructions are expected to be issued not later than the second business day after each pay day. ~98-10-140 3 M$202-0306~k 3.98 SEPARATION FROM SERVICE In accordance with the roles and regulations of the Internal Revenue Code Section 457 and the New York State Deferred Compensation Plan Document, all Plan members who separate from service with their employer are required to file a written payout election within one hundred twenty (120) days after their date of separation. One of Copeland's responsibilities as the Administrative Service Agency is to contact these individuals, secure the payout election, and make arrangements for withdrawal of funds where appropriate. Therefore, the Employer is asked to provide a listing of all employees who have separated from service on a monthly basis. QUARTERLY REPORTS All Plan participants will receive quarterly statements of their Plan Account after the close of each calendar quarter. We will also provide the Employer with a Quarterly Report which summarizes all Plan activity. PLAN WITHDRAWALS / TAX REPORTING REQUIREMENTS Ail withdrawals from the Plan, be they due to termination of employment, retirement, death or financial emergency, will be handled entirely by the Plan's Administrative Service Agency and the Plan's custodian bank. The Plan's custodian bank will provide W-2 or 1099 forms to participants who withdraw funds from the Plan and will report and pay all applicable Federal, State, and local taxes on behalf of the Plan. When preparing regular year-end W-2s, the Employer should reflect an adjusted salary by checking "Deferred Compensation" in box 5 of Form W-2 and reporting the deferral amount in box 16 indicating that deferral amounts are from a 457(b) plan. :ff98-10-140 4 MS202-0306p~k 3.98 (SAMPLE WIRE) Chase Manhattan Bank 4 New York Plaza 15th Floor New York, New York 10004 For the Account of #573-804516 ABA #021000021 Chase Manhattan Bank as Custodian For The New York State Deferred Compensation Plan DO! J ,AR AMOUNT PAYDATE EMPLOYER NAME SUBCASE # #98-10-140 5 MS202-0306pek 3.98 PAYROLL DEDUCTION SPECIFICATIONS Field Name Field Start Type Format Size Position DETAIL RECORDS Employer ID 5 01 N 9(5) Pay Cycle 2 06 C X(2) IRS Code 4 08 C X(4) Money Type 2 12 C X(2) Social Security Number 9 14 C X(9) Pay Date 6 23 N 9(6) Employee Dept.# 10 29 C X(10) Employee # 10 39 C X(10) Participant Name 23 49 C X(23) Deduction Amount 9 72 N S9(7)V99 Defaults/Comments YYMMDD Last, First MI Impfied decimal TRAILER (Optional - Tape Media Only) Record Count 5 01 N 9(5) Filler 17 06 C X(17) spaces Filler 6 23 N 9(6) zero fill Filler 43 29 C X(43) spaces Total Deductions 9 72 N S9(7)V99 EXAMPLE: 9999901403BEEI23456789940101DEPTNO9999EMPN0999 DOE, JOHNR 000001000 9999901403BEE234567890940101DEPTNO9999EMPN0999 SMITH, MARY K 000007500 00002 000000 000008500 NOTES: 1. Employer ID numbers will be assigned by Plan's Administrative Service Agency. 2. Deduction amounts can be either zero filled or right justified. Decimal points are implied and should not be included. If not identified hexadecimally, negative numbers are represented by a '-' in the left-most or right-most position of this field. TYPES: C = Character (alpha numeric, lefi-justified) N = Numeric (zoned, signed, decimal, right-justified) 9 Track Tape or 1/2" CarO~ge: Record Length: 80 Format: EBCDIC - NonCompressed Speed: 1600 or 6250 BPI Label: SL or NL Block Length: 4000 Record Format: FB MEDIA: PC Diskette: Record Length: 80 Format: ASCII (undelimited) Size: 3.2 or 5.25 up to 1.4 Mb 1 record per line No headers or blank lines 498-10-140 6 MS202-O306pek 3.98 Administrative Checklist for the NEW YORK STATE DEFERRF. D COMPENSATION PLAN EMPLOYER NAME: DATA PROCESSING EMPLOYER CONTACTS PAYROLL NAME TITLE ADDRESS NAM~ TITLE ADDRESS ( ( TELEPHONE # ) FAX # ) TELEPHONE # FAX# MAIN CONTACT NAME T1TLE ADDRESS TELEPHONE # FAX # ~)8-10-140 MS202-0306p~k 3,98 7 PAYROLL INFORMATION · Number of eligible employees Please indicate several of your paydates and if there are multiple payrolls, please indicate each separately (PLEASE ATTACH A FULL PAYROLL SCHEDULE FOR EACH PAYROLL) Payroll 01 Payroll 02 Payroll 03 Payroll Frequency (weekly, bi-weekly, monthly) Payroll O1 Payroll 02 Payroll 03 Initial Remittance Date (Paydate) Payroll Ol Payroll 02 Payroll 03 · Remittance Frequency Payroll 01 Payroll 02 Payroll 03 · Do you require or supply any unique identifiers (i.e., employee number, department number, etc.) and, if so, the total number of digits contained in each. · Will payroll remittances be a percent of salary or on a fiat dollar basis? · How will payroll funds be remitted to the Plan's Administrative Service Agency? (wire transfer/check) · What medium will be used to submit your payroll remittances? (magnetic tape, diskette, hard copy) · Payroll deduction transmittal - Payroll Authorization Card - lead time (how many days prior to each paydate will you require receipt of transmittal to activate on the selected paydate?) · Separation from service listing media (hard copy, tape) AFTER COMPLETING TIlE CIll~.CKLIST, PLEASE RETURN TIlE FORM TO: New York State Deferred Compensation Plan Attn: Marketing Department Two Tower Center P.O. Box 1063 East Brunswick, New Jersey 08816-1063 #98-10-140 8 MS202-0306gek 3.98 As a local public employer in New York State, you are eligible to participate in the New York State Deferred Compensation Plan. By adopting the Plan, you can offer your employees an important benefit that will allow them to better plan for a financially secure retirement. This material is designed to give you an overview of the Plan, its investment options, and the costs and charges associated with participating in the Plan. There is no cost to you, the employer, for making this plan available to your employees. Our philosophy in marketing the New York State Deferred Compensation Plan is simple: by emphasizing education and counseling, we encourage a larger percentage of eligible employees to enroll in the Plan. Rather than see an opportunity to "sell" a product, we are "selling" an oppommity to better plan for a comfortable retirement. Employees receive an unbiased presentation that will not suggest one investment option over another, but instead allow them to make well-informed decisions pertaining to their own financial objectives. The Plan has 10 full-time Field Representatives who are available to assist both employers and employees in learning more about the New York State Deferred Compensation Plan. Communication services such as group meetings, information booths, a toll-free HELPLINE, a Plan Web site, and printed material including various brochures and a quarterly newsletter are designed to educate eligible employers and employees about the advantages the Plan has to offer. What follows is a explanation of the various phases in the New York State Deferred Compensation Plan. PRE-ENROLLMENT ANNOUNCEMENT - This initial formal communication to all employees will announce the availability of the Plan. We have found that making employees aware of their Employer's interest in their welfare has been an invaluable aid in communicating the New York State Deferred Compensation Plan's value in a constructive and positive manner. An initial armouneement to employees can be accomplished by posters or a payroll distribution announcing availability of the Plan. I~IANAGEMENT INFORMATION MEETING - All orientation meeting with supervisors provides a general explanation of the operation and administration of the Plan, the benefits it offers to employees and the available Plan investment options. This meeting also enlists management's cooperation in the scheduling of group meetings for the dissemination of information about the Plan to all employees. #98-10-141 MSW201-0130 7.98 1 EMPLOYEE INFORMATION MEETINGS - Group meetings for employees are held at convenient times and locations. These meetings ensure that a consistent body of information about the New York State Deferred Compensation Plan is presented to all employees. Our experience indicates that employees who are introduced to the Plan through this method develop a higher level of understanding about the Plan and the benefits it offers. Group meetings are used to explain the New York State Deferred Compensation Plan, answer general questions, and give employees the opportunity to enroll by having enrollment kits available. A copy of the current enrollment kit is included with this proposal. A toll-free HELPLINE is available for employees who have questions about the Plan both prior to and after enrollment. The HELPLINE also serves as an invaluable communication vehicle by providing information to those employees who are unable to attend group meetings and have questions about the Plan. REORIENTATION PROGRAM - We believe that while it is important to continuously update participating employees regarding the New York State Deferred Compensation Plan, it is equally important to inform non-participants about the Plan. Therefore, we will periodically return to do additional group meetings for new employees and for those who chose not to enroll when the Plan was first made available to them. Enrollment rates are likely to increase over time as long as non- participating employees have on-going access to Plan information. #98-10-141 MSW 201-0130 7.98 2 EMPLOYEE COMMUNICATIONS AND SERVICES The Plan's communication services have been developed with a focus on educating and informing employees about the benefits of participating in the New York State Deferred Compensation Plan. Communication services provided to participants include: Toll-Free Customer Service and Plan Account Access In addition to having ten Field Representatives, centralized customer service through a toll- free number provides participants in the New York State Deferred Compensation Plan with the best customer service possible while giving them flexibility with respect to their Plan Accounts. Our toll- free HELPLINE is staffed with licensed counselors dedicated to the service of the New York State Deferred Compensation Plan. They are available Monday through Friday 8 a.m. to 11 p.m. (Eastern Time) and Saturdays 9 a.m. to 6 p.m. to answer questions regarding Plan enrollment and participation. The Plan's Automated Voice Response Unit (VRU) is available 24 hours a day for added flexibility and convenience. The VRU allows participants to obtain information about Plan Account values, contributions, request Plan materials, make transfers between investment options, change their future allocations, and much more. For security purposes, access to the VRU requires the use of a participant's Social Security number and Personal Identification Number. Prior to enrollment in the New York State Deferred Compensation Plan, employees can contact the HELPLINE to receive information about the Plan or obtain an enrollment kit. Once enrolled, participants can utilize the HELPLINE, VRU, or the Plan's Web site (discussed later in this material) to obtain information about the Plan or their Plan Accounts. Quarterly Plan Newsletters Each quarter, a customized Plan newsletter will be distributed to each participant in the Plan. The newsletter is designed to keep participants well informed and educated about the Plan and retirement planning in general. Most newsletters include an article reprinted from the Wall Street Journal or the New York Times, various articles on Plan roles and regulations, Plan enhancements and changes and performance results for each of the investment options available in the Plan. The newsletter is an important tool used to communicate with all Plan participants, both new and old. A sample of the most recent issue is enclosed for your review. MSW 201-0130 #98-10-141 7.98 3 Participant Statement All participants in the Plan will receive quarterly statements showing individual Plan Account activity for the quarter. The statements allow participants to track how their Plan Account is performing. Along with the account activity for the quarter, they will find their inception to date contributions to the Plan, any withdrawals they've made from the Plan and more. Participants who have questions about their statement may call the HELPLINE at 1-800-422-8463 for assistance. Plan Web Site The Plan's Web site has been designed to provide participants with access to basic Plan information as well as information about their own Plan Account. The site allows participants to access frequently asked questions about the Plan, previous Plan newsletters, a description of each of the available investment options, recent performance results for these funds and much more. The Web site also allows participants to use the Financial Calculators section to go through a paycheck analysis to see how participation in the Plan would affect their take-home pay, or they can calculate how their contributions will grow over time using our Accumulation Illustration section. There is also information for employers who are interested in adopting the Plan. See for yourself by visiting www.nysdcp.com. MSW 201-0130 #98-10-141 7.98 4 THE ADVANTAGES OF ADOPTING THE NEW YORK STATE DEFERRED COMPENSATION PLAN There are many advantages to adopting the New York State Deferred Compensation Plan. No COST TO You, THE EMPLOYER - There are no costs or charges for offering the Plan to your employees. The Plan's expenses are paid by the participants in the Plan as well as by reimbursements the New York State Deferred Compensation Board has negotiated with the various investment providers within the Plan. The only expenses you may incur with respect to the Plan will be the cost of transmitting contribution information to the Plan's Administrative Service Agency on an ongoing basis. No NEED TO ESTABLISH A TRUST - Eligible employers who adopt the New York State Deferred Compensation Plan are not required to establish their own individual trust agreements. The Plan already has a trust agreement in place. SIMPLIFIED ADMINISTRATIVE PROCEDURES - Over 350 local employers participate in the Plan. In order to make their job as easy as possible, the Plan's Administrative Service Agency has designed procedures to take most of the administrative burden off the employer. Basically, all you have to do is send Plan contributions and instructions to us each pay period. We take care of the rest. Of'~'~RING AN IMPORTANT BENEFIT TO YOUR EMPLOYEES - The New York State Deferred Compensation Plan is a high quality, low cost retirement savings program. The Plan can help your employees plan for a financially secure retirement and offers a wide variety of participant services, many of which have been described in this material. The Plan can be an important part of the employee benefits package you offer. #98-10o141 MSW 201-0~30 7.98 5 NEW YORK STATE DEFERRED COMPENSATION PLAN INVESTMENT OPTIONS The investment options offered under the New York State Deferred Compensation Plan offer diversity and flexibility to Plan participants. Amounts that participants contribute to the New York State Deferred Compensation Plan may be invested in one or more of the following investment options: Stable Income Fund A stable income fund seeks to provide maximum credited interest that can be earned using guaranteed investment contracts and short-term investments. The Stable Income Fund The fund is designed to provide a high level of interest income with low risk of price fluctuation. The assets of the Stable Income Fund are held in trust for the benefit of participants of the New York State Deferred Compensation Plan (the "Plan"). Investments in the Stable Income Fund are credited with a blended interest rate that reflects the combined weighted interest remm of all contracts held by the Stable Income Fund. The New York State Deferred Compensation Board (the "Board") anticipates that the blended interest rate for the period from July 1 through September 30, 1998 will be approximately 6.45%. Currently, the Stable Income Fund is comprised of lhree portions: 1) guaranteed interest contracts, 2) managed bond portfolios, sometimes referred to as "synthetic" guaranteed interest contracts, and 3) a short-term cash portfolio. Guaranteed Interest Contracts. This portion, currently about 70% of the Stable Income Fund, seeks the highest interest guarantees consistent with the Board's policy of selecting insurers that show superior financial strength and maintain appropriate diversification of the Stable Income Fund. A guaranteed interest contract, however, is an unsecured obligation of an insurance company, and the value could be adversely affected if the issuer were to become insolvent or impaired. The claims-paying ability ratings of the current providers are shown on the following page. #98-10-141 MSW201-0130 7.98 6 * Ratings as of December, 1997 Insurer A.M. Best Moody's Duff & Phelps Standard & Poor's John Hancock Mutual A-~- Aa2 AAA AA+ Life Insurance Company (Superior) (Excellent) (Very High) (Excellent) Metropoliten A+ Aa2 AA+ AA Life Insurance Company (Superior) (Excellent) (Very High) (Excellent) New York A++ Aal AAA AA+ Life Insurance Company (Superior) (Excellent) (Highest) (Excellent) Principal Mutual A+ Aal AAA AA+ Life Insurance Company (Superior) (Excellent) (Highest) (Excellent) Prudential A A 1 AA A+ Insurance Company (Excellent) (Good) (Very High) (Good) * Ratings published by A.M. Best Company, Inc., Duff & Phelps Credit Rating Company, Moody's Investors Service, Inc., and Standard & Poor s Corporation rgflect the respec#ve company's opinion as of the date it published the rating concerning the financial strength and claims-paying ability of each insurer. Ratings are only one factor you should consider when you evaluate an insurer. Managed Bond Portfolios. Currently about 25% of the Fund is held in bond portfolios managed by registered investment advisers pursuant to specific investment guidelines set by the Board. A minimum investment return on each portfolio is guaranteed by a bank. A trustee owns the underlying investments of these portfolios on behalf of the Plan. The current investment advisors, trustees and bank guarantors are shown below: Investment Advisor Brundage, Story & Rose Putnam Advisory Company, Inc. T. Rowe Price Stable Asset Menageraent, Inc. Trustee Fifah Third Bank Putnam Fiduciary Trust Company The Chase Manhattan Bank Guarantor Banker~ Trust (Delaware) Bankers Trust (Delaware) Deutsche Bank AG, New York Branch Short-Term Cash Portfolio. Currently, about 5% of the Stable Income Fund is held in a short-term cash portfolio. It is managed by Black Rock Financial Management, Inc. pursuant to specific invesunent guidelines set by the Board. The Plan's trustee owns the underlying investments of this portfolio on behalf of the Plan. Daily contributions, transfers and distributions to and from the Stable Income Fund are made from this portion of the Fund. #98-10~141 MSW201-0130 7.98 7 Money Market Fund Money market mutual funds invest shareholder's capital in debt securities with very short maturities. Vanguard Money Market Reserves Prime Portfolio The fund's objective is to provide current income consistent with preservation of capital and liquidity by investing in money market instruments and maintaining a constant net asset value orS1.00 per share. Bond Funds A bond is a debt security similar to an IOU between the bond holder and the issuer. A company or a government agency will issue a bond to raise money and will promise to pay the bond holder interest plus repay the principal on the maturity date. In managed bond funds, bonds arc traded (bought and sold) between the time they are issued and when they mature. Like stocks, their market prices may go up or down. Bond prices move inversely to interest rates; that is, their prices go up when interest rates go down, and their prices go down when interest rates go up. MAS Global Fixed Income Portfolio - Institutional Shares The fund invests in high quality fixed income investments in both foreign and U.S. markets and seeks above average total return (principal and income). A relative valuation process is used to determine maturity, country allocation and currency exposure. Seligman High-Yield Bond Fund A The fund seeks to maximize current income by investing in a diversified portfolio of high- yielding, high-risk corporate bonds. Securities with high yields are usually rated below investment grade and are commonly referred to as "junk bonds." Vanguard Bond Index - Total Bond Market Portfolio The fund seeks to provide a high level of interest income by investing in a sample of bonds from the Lehman Brothers Aggregate Bond Index. It invests in U.S. Treasury and agency securities, corporate bonds and mortgage-backed securities with maturities greater than one year. #98-10-141 MSW 201-0130 7.98 8 Vanguard GNMA Portfolio The fund seeks current income consistent with maintaining principal and liquidity. At least 80% of the assets are invested in intermediate maturity Government National Mortgage Association (GNMA) certificates. Balanced Funds A balanced fund invests in both stocks and bonds. It provides a balance between risk and remm that investments in bonds or stocks alone are not expected to achieve. The purpose is to achieve higher returns than a bond fund but with less volatility or price fluctuation than most common stock funds. Calvert Social Investment Fund - Managed Growth Portfolio The fund is an actively managed portfolio that seeks income and capital growth through investments in a combination of stocks and bonds. The fund invests in strong, forward- looking companies that operate with integrity towards their customers, employees, community and the environment. It will not invest in companies engaged in nuclear-energy production or weapons. The George Putnam Fund of Boston The fund seeks capital appreciation and current income by investing in common stocks, convertibles, bonds and money market instruments. The fund holds undervalued stocks with potential for earnings improvement and moderate duration, high quality bonds. Up to 20% of the fund assets may be invested in foreign securities. Vanguard Wellington Fund The fund seeks preservation of capital and reasonable income by investing in common stocks, convertibles and bonds, with limited cash reserves. The fund focuses on high dividend-paying stocks and long duration, high quality bonds. It invests about 65% of its assets in stocks and 35% in bonds. Up to 15% of the fund's equity assets may be invested in foreign securities. The fund may also invest in fixed-income secarities issued by foreign governments and non-U.S, based companies; however, these securities must be valued in U.S. dollars. #98-10-141 MSW 201-0130 7.98 9 U.S. Common Stock Funds A common stock represents an equity (ownership) interest in a corporation. Although equity securities have a history of long-term growth, their prices fluctuate based on changes in a company's financial condition and on overall market and economic expectations. Smaller companies can be especially sensitive to these factors. The U.S. common stock funds offered as part of the Plan are grouped by company size to help differentiate them. Large Company Davis New York Venture Fund A The fund seeks long-term growth of capita/by investing in well-managed growth companies that the manager believes are selling at value prices. The fund will hold its favorite companies for the long-term. Dreyfus Appreciation Fund The fund seeks long-term capital growth consistent with the preservation of capital by investing in stocks of very large U.S. companies that are industry leaders with global presence and above average expected earnings growth. Current income is secondary. Janus Fund The fund seeks long-term capital growth consistent with preservation of capital. It uses a bottom-up approach and emphasizes large well-established companies with earnings growth potential. Oppenheimer Quest Opportunity Value Fund A The fund emphasizes large capitalization companies that are selling at attractive prices and which provide the best oppommity for long-term growth. It may also invest in bonds and cash equivalent securities. T. Rowe Price Equity Income Fund The fund seeks high income and long-term capital growth. Holdings will be concentrated in dividend-paying common stocks, particularly of established companies, with favorable #95-10-141 MSW201-0130 7.98 10 prospects for both increasing dividends and capital appreciation. Cash and other fixed income securities may also be used. Vanguard Institutional Index Fund The fund seeks to provide long-term growth of capital and income from dividends by investing in all 500 stocks in the Standard & Poor's 500 Composite Stock Price Index. Vanguard U.S. Growth Portfolio The fund seeks to provide long-term growth of capital by investing in stocks of large, high quality U.S. companies believed to have exceptional growth records, strong market positions, reasonable financial strength and relatively low sensitivity to changing economic conditions. Mid-Size Company Fidelity Magellan Fund The fund seeks capital appreciation by investing in common stock and convertible securities of domestic, foreign and multinational companies both well-known and lesser-known, with above average growth potential and a correspondingly higher level of risk. Fidelity OTC Portfolio The fund seeks capital appreciation and invests primarily in securities that trade on the over the counter (OTC) market. Securities traded on the OTC market tend to be from smaller or newer companies which generally involve greater investment risk than well-known companies. MAS Value Portfolio - Investment Class Shares The fund uses a value orientation and invests in stocks of multi-sized companies. Its goal is to provide above-average long-term total return consisting of both capital appreciation and income. The fund uses both a valuation process and individual security analysis to develop a portfolio with an overall price-earnings ratio and price-book value ratio below the market's. MFS Research Fund A The fund's objective is to provide long-term growth of capital and future income. It is described as a "best ideas" portfolio managed by a committee of industry analysts. Each analyst selects stocks within his/her industry that offer the highest probability of capital appreciation. Sector and industry weightings are determined by the analysts as a group. MSW 201-0130 #98-10-14! 7.98 11 Small Company PBHG Emerging Growth Fund The fund has an aggressive growth orientation and invests in small companies. The fund's goal is long-term growth of capital. Holdings are concentrated in companies that have historically exhibited exceptional or strong growth in earnings and in the adviser's opinion, have an expected trend of earnings higher than that of the U.S. market as a whole. International Stock Funds International stocks are common stocks of companies with headquarters outside the United States and listed on foreign stock exchanges. These securities are subject to the same factors that cause fluctuations in common stock prices in the U.S. There are additional factors for investors to consider, such as the stability of the government in the counlry in which the company primarily operates, the less efficient flow of information and market regulation, and currency exchange rate fluctuations and controls. Putnam International Growth Fund The fund seeks capital appreciation by investing in a group of large and small non-U.S. common stocks with above average growth expectations or perceived undervaluations. The fund may invest in both developed and emerging markets. T. Rowe Price International Stock Fund The fund seeks long-term growth of capital by investing in established non-U,S, companies. Stocks are selected from both developed and emerging countries based on characteristics such as above average growth rotes and reasonable price/earnings ratios. #98-10-141 MSW 201-0130 7,98 12 PLAN COSTS AND CHARGES Participants in the New York State Deferred Compensation Plan will be charged administrative fees for the Plan year beginning April 1, 1998 and ending March 31, 1999 in two parts. First, each participant will be charged an $8 annual flat fee, assessed in two $4 semi-annual charges in March and September. This fixed fee will appear on their Plan Account statement as a deduction. Second, participants will be charged a variable asset-based fee that will be assessed quarterly directly against investment returns. The mount of the asset-based fee charged to any individual participant will depend on their Plan Account balance and the investment options in which their Plan Account is invested. The Plan's administrative expenses are partially offset by reimbursements the Board has negotiated with most of the Plan's mutual fund providers. We anticipate that the average participant asset-based fee will be approximately 0.01% of their account balance and that the maximum mount that any one participant will be charged will be 0.018%. If your Plan Account balance were $10,000, that would be a maximum of $1.80 in addition to the $8 annual fixed fee. In addition, each of the mutual funds offered by the Plan has fund expenses that are netted directly from each mutual fund's dally price. These will vary based upon the investment fund selected. Currently, these expenses are as follows: Calvert Social Investment Fund - Managed Growth Portfolio 1.14% Davis New York Venture Fund A 0.89% Dreyfus Appreciation Fund 0.96% Fidelity Magellan Fund 0.66% Fidelity OTC Portfolio 0.85% The George Putnam Fund of Boston 1.06% Janus Fund 0.86% MAS Global Fixed Income Portfolio - Institutional Shares 0.59% MAS Value Portfolio - Investment Class 0.80% MFS Research Fund A 0.96% Oppenheimer Quest Opportunity Value Fund A 1.54% PBHG Emerging Growth Fund 1.28% #98-10q41 MSW 2014)130 7.98 13 Putnam International Growth Fund Seligman High Yield Bond Fund A T. Rowe Price Equity Income Fund T. Rowe Price International Stock Fund Vanguard Bond Index Fund - Total Bond Market Portfolio Vanguard GNMA Portfolio Vanguard Institutional Index Fund Vanguard Money Market Reserves-Prime Portfolio Vanguard U.S. Growth Portfolio Vanguard Wellington Fund 1.59% 1.16% 0.81% 0.88% 0.20% 0.27% 0.06% 0.32% 0.42% 0.31% #98-10-141 MSW 2014)130 7.98 14 How To ADOPT THE NEW YORK STATE DEFERRED COMPENSATION PLAN In order to adopt the Plan, an eligible local public employer must pass a resolution. Once this is done, two original copies of this resolution, along with the administrative forms located at the back of the Administrative Guidelines, must be forwarded to the Plan's Administrative Service Agency. A postage paid envelope is included with this information. Once the Administrative Service Agency has received your paperwork, it will be forwarded to the State for the appropriate ill'rog. A Plan Field Representative will then contact you to schedule group meetings for your employees and answer any questions you may have. How To TRANSFER EXISTING PLAN ASSETS If you already have a deferred compensation plan in place and would like to transfer those assets to the New York State Deferred Compensation Plan, we can help. If the plan you currently have does not impose any surrender charges for distributions, you may be able to transfer assets to the New York State Deferred Compensation Plan once you have adopted it. If your current plan does impose surrender charges, we would suggest you walt until these surrender charges no longer apply, usually within five years, before you transfer the assets. If this situation applies to you, a Plan Representative can help you work through all the details. HAVE ADDITIONAL QUESTIONS? A Plan Representative is available to answer any questions you may have about the Plan. Just call 1-800-422-8463 and we'll be happy to assist you. MSW 201-0130 #98-1~-141 7.98 15 NEW Yom STATE DEFERRF, D COMPENSATION PLAN INVESTMENT OPTION OVERVIEW STABLE INCOME FUND The Stable Income Fund is designed to provide a high level of interest income with low risk of price fluctuation. The assets of the Stable Income Fund are held in trust for the benefit of participants of the New York State Deferred Compensation Plan (the "Plan"). Investments in the Stable Income Fund are credited with a blended interest rate that reflects the combined weighted interest return of all contracts held by the Stable Income Fund. The New York State Deferred Compensation Board (the "Board") anticipates that the blended interest rate for the period from July 1, 1998 through September 30, 1998 will be approximately 6.45%. Currently~ the Stable Income Fund is comprised of three portions: 1) guaranteed interest contracts, 2) managed bond portfolios, sometimes referred to as "synthetic" guaranteed interest contracts, and 3) a short-term cash portfolio, Guaranteed Interest Contracts. This portion, currently about 70% of the Stable Income Fund, seeks the highest interest guarantees consistent with the Board's policy of selecting insurers that show superior financial strength and maintain appropriate diversification of the Stable Income Fund. A guaranteed interest contract, however, is an unsecured obligation of an insurance company, and the value could be adversely affected if the issuer were to become insolvent or impaired. The claims-paying ability ratings of the current providers are shown below. * Ratings as of December, 1997 Insurer A.M. Best Moody's Duff& Phelps Standard & Poor's John Hancock Mutual A-~- Aa2 AAA AA+ Life Insurance Company (Superior) (Excellent) (Very High) (Excellent) Metropolitan Life A+ Aa2 AA+ AA Insurance Company (Superior) (Excellen0 (Very High) (Excellen0 New York Life Insurance A+-+- Aal AAA AA+ Company (Superior) (Excellent) (Highest) (Excellen0 Principal Mutual Life A+ Aal AAA AA+ Insurance Company (Superior) (Excellent) (Highest) (Excellent) Prudential Insurance A A 1 AA A+ Company (Excellent) (Good) (Very High) (Good) * Ratings published by A.~ Best Company, Inc., Duff & Phelps Credit Rating Company, Moody's Investors Service, Inc., and Standard & Poor's Corporation reflect the respective company's opinion as of the date it published the rating concerning the financial strength and claims-paying ability of each insurer. Ratings are only one factor you should consider when you evaluate an insurer. NYSDCP1/7.01.98 Managed Bond Portfolios. Currently about 25% of the Fund is held in bond portfolios managed by registered investment advisers pursuant to specific investment guidelines set by the Board. A minimum investment return on each portfolio is guaranteed by a bank. A trustee owns the underlying investments of these portfolios on behalf of the Plan. The current investment advisors, trustees and bank guarantors are shown below: Investment Advisor Brundage, Story & Rose Putnam Advisory Company, Inc. T. Rowe Price Stable Asset Management, Inc. Trustee Fifth Third Bank Putnam Fiduciary Trust Company The Chase Manhattan Bank Guarantor Bankers Trust (Delaware) Bankers Trust (Delaware) Deutsche Bank AG, New York Branch Short-Term Cash Portfolio. Currently, about 5% of the Stable Income Fund is held in a short- term cash portfolio. It is managed by Black Rock Financial Management, Inc. pursuant to specific investment guidelines set by the Board. The Plan's trustee owns the underlying investments of this portfolio on behalf of the Plan. Daily contributions, transfers and distributions to and from the Stable Income Fund are made from this portion of the Fund. NYSDCPI/7.01.98 Town of Southold 53095 Main Street Southold, New York 11971 "REQUEST FOR PROPOSAL" Section 457 - DEFERRED COMPENSATION Submit Five (5) copies and one (1) original of the proposal no later than 11;00 a.m. 1998.Send to: Elizabeth Neville Town of Southold Town Clerk's Office 5309fl Main Street Southold. New York 11971 This document constitutes a request.from qualified Administrative Service Agencies and/or Financial Organizations relating to trust service, administration and/or funding of an "eligible~ IRC Section 457 deferred compensation plan under the New York Model Plan. INTRODUCTION The purpose of the proposed deferred compensation plan will be to provide eligible employees with a convenient way to provide for a long-term retirement program and to encourage broad-baaed participation of employees in the plan. We do not want to imply that any specified amount of contributions will be made, but we do want to assure that this additional benefit is recognized by ali employees and that they have the opportunity to participate. The benefits provided to any participant under our plan will be based upon the aggregate amount deferred and will depend upon the investment results achieved by the fili~'lal Of~Yti~'~tiO~S) appointed to invest the assets of the plan, allocated to each of the plan's investm~ funds l~oundm- ami the participant's individual investment choices among the phm's investment funds. Each pmicipam sludl be 100 percent vested at ail times in his or her plan inmefit in accordance with the terms of the Regulations and the Model Plan. The plan is intended to qualify as an "eligible deferred compensation plan" under Section 457 ("Section 457") of the Internal Revenue Code of 1986 ("Code"), aa now in effect or hereinafter amended, especially in accordance with amendments made by the "Small Busine~ Job Protection Act of 1996" nad by the "Taxpayer Relief Act of 1997". To become an "eligible dek-,rred compensation plan" in the State of New York, the plan must also meet all the requirements of Section 5 of the State Finance Law (Section 5"), including aH the '*Proposed Revi~d Rules and Regulations" promulgated by the New York State Deferred Compensation Board ("Board"): Parts 9000 to 9006 of Subtitle H of T'gle 9 NYCRR ("Subt'~le II"). As an "eligible deferred compensation plan", amounts of compensation deferred under the plan, including any income attributable thereto, will not be included in the gross income of the plan parti~t~ until the taxable yea~ or year~ in which such amounts are actually distributed or nmde available to the participant or the participant's benef~aty. Additionally, in accordance with the Small Buaineaa Job Protection Act of 1996: aH amounts of compensation deferred under the plan, all property and rishts purchased with such amounts, and ali income attributable to such amounts, property or rights, shall be held by one or more trustees pursuant to a trust agreement for the exclusive benefit of participants and their ~es. This document co~,~itutes a reques~ from qualified Administrstive Service A~encies and/o~ Fimmc~al O~ganiz~ons relating to (1) trust service, (2) n.4mini~tratio~ and/or (3) fumt~s o~ "zligible" deferred compensation plan. Ir'you are "quali~d" according to the Regulatiom to administer, maintain records and accounts of plans and/or if you have ~ppropriate trust services and/or products available for use a~ funding media ~nd are interested in making those services and/or products available, you are requited to complete this invitation for proposal. 2 PROCEDURES GOVERNING SUBMISSION OF PROPOSALS L Form and Substance of Proposals Attached you will find: the "Revised Proposed Resulations" (published March 4, 199g in the State Register), hereafter referred to as the "Regulations", and the Model Plan (as amended and restated April 1, 1998) promulgated by the Board for which you are to rely on for responding to this invitation for proposal. Failure to conform to or satisfy any requirement of these documents will result in the immediate rejecfiou of the proposal. This invitation for proposal will require, in whntever event, the establishment of both a committee and a trustee. To receive consideration, all proposals: Must include a fully completed questionnaire, restating each statement or question in Section I through Section V inclusive, and by reonrding your response d'trectly below each start or question. Please do not add additional sections. Must respond to all questions in the "Contractual Requirements" section (Section I) and must conform to the specifications set forth in this Request For Proposal ("RFP"). Must contain a representation that the proposal complies with all requ'trements of the affa~ked Regulations and the Model Plan and clearly indicates all direct fees, indirect fees and charges. * Must include a ~msm/~a/~ on the Company's official letterhead signed by an official of the Company who is authorized to commit the organization to perform the services outlined in the submitted proposal: indicate such commitment. * Must submit _~ copies and mae (1) origimal of the proposal by first-class or overnight delivery service to arrive no later than 11:00 a.m. August 14, 1998, Send to: Elizabeth Neville Town of Southold 8~095 Main Street Southold, New York 11971 * Must d'mplay the following identification on the outside lower left-hand comer: RESPONSE TO REQUEST FOR PROPOSAL - DEFERRED COMPENSATION ENCLOSED It is each bidders responsibility to assure that proposals are shipped in a fm~ely fashion so as to he received by the designated party on or before the due date. Proposals received after the spec'tried date will not be considered. We accept no responsibility for lost and/or late delivery ofproposais. By submitt'mg a proposal, each bidder agrees not to make any claims for or have any right to damages because of any misunderstanding or misrepresentation of specifications, because of any 3