Salary Reduction Agreement for 403(b)1 and 403(b)7 “403(b) Plan” Name: Highland Community Unit School District No. 5 403(b) Plan Employer: Highland Community Unit School District 5 Address: 400 Broadway, Highland, IL 62249

IMPORTANT NOTICE Before you sign: Read this entire Agreement including the important information on the reverse side of this form. Each Employee who initiates or changes contributions to a 403(b) Plan shall, at such time, provide the Employer with a copy of a calculation of his/her maximum deferral limit from the Employee’s chosen annuity or custodial account provider or any other party acceptable to Employer. For each Employee contributing more than $18,500* or utilizing the “catch-up provisions” or the special elections, where such elections are allowed by the 403(b) Plan and the Internal Revenue Code, such a calculation shall be required annually. A copy of such calculation shall be provided to Employer by November 1 of each calendar year in which the “catch-up provisions” or “special elections” are utilized or an Employee’s contribution is proposed to exceed $18,500.

may arise from the purchase of annuities or custodial accounts. Employee acknowledges that Employer has made no representation to Employee regarding the advisability, benefits, appropriateness or tax consequences of the purchase of the annuity and/or custodial account described herein. Employee agrees Employer shall have no liability whatsoever for any and all losses suffered by Employee with regard to his/her selection of the annuity and/or custodial account. Nothing herein shall affect the terms of employment between Employer and Employee. This Agreement supersedes all prior Salary Reduction Agreements for 403(b) contributions and shall automatically terminate if Employee’s employment is terminated.

Important Information 1. 2.

Part 1. Employee Information Name

3.

Employee Identification # Address

Part 2. Agreement The above named Employee agrees to modify his/her salary as indicated below. Employer agrees to contribute this amount on Employee’s behalf into the 403(b) annuity or custodial accounts selected by Employee. It is intended that the requirements of all applicable state or federal income tax rules and regulations (Applicable Law) will be met. The Employee understands and agrees to the following: 1. 2.

3.

This Salary Reduction Agreement is legally binding and irrevocable with respect to amounts paid or available while this agreement is in effect. This Salary Reduction Agreement may be terminated by a subsequent Salary Reduction Agreement at any time for amounts not yet paid or available, and such termination is permanent and remains in effect until a new Salary Reduction Agreement is submitted. This Salary Reduction Agreement may be changed with respect to amounts not yet paid or available in accordance with the Employer’s administrative procedures.

Employee is responsible for determining that the salary reduction amount does not exceed the limits as set forth in Applicable Law. Furthermore, Employee agrees to indemnify Employer and hold Employer harmless against any and all actions, claims and demands whatsoever that

4.

5.

6.

Employer does not choose the annuity contract or custodial account in which your contributions are invested. Employees are responsible for preparing and signing all legal documents necessary to establish each annuity contract or custodial account, with the assistance of the Service Provider for said annuities and accounts. However, in certain group annuity contracts, Employer is required to establish the contract. Employees are responsible for naming a death beneficiary under annuity contracts or custodial accounts, and Employee acknowledges that this is normally done at the time the contract or account is established and that such beneficiary designations should be reviewed periodically. Employees are responsible for all distributions and any other transactions with Service Provider. All rights under contracts or custodial accounts are enforceable solely by Employee, Employee’s beneficiary or Employee’s authorized representative. Employee must deal directly with Service Provider to make loans, transfer to different contracts or custodial accounts, begin distributions, or any other transactions. Employee agrees to indemnify and hold harmless the Employer from any claim which may arise out of or be connected with the calculation of a maximum annual contribution calculation (MAC) for the Employee. Employee agrees that the Employer shall make no representations concerning the calculation or accuracy of the Employee’s MAC.

7. Employee consents and agrees that the Employer may adjust the amount reduced from the Employee’s salary pursuant to this Agreement for the benefit of the Employee if the Employer becomes aware of any error or reduction amount that may cause the Employee’s MAC to be exceeded.

Part 3. Employee Representation A.

Employee Plan Participation (check only one)

____ I do not and will not have any elective deferrals, voluntary salary reduction contributions, or non-

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elective contributions with any other employer during the Plan Year. ____ I do participate in another employer’s 403(b), 401(k), Simple IRA/401(k), or Salary Reduction SEP. The following information pertains to such participation: 1. Includible Earnings : $__________ 2. Elective Deferrals and/or salary reduction contributions: Roth 403(b) $________; Roth 401(k) plan $______________; Non-Roth $______________ 3. Non-elective Contributions: $____________ B.

Maximum Elective Deferral Salary Reduction Contributions (check only one)

____ I have determined that my elective deferral/salary reduction contribution does not exceed the Basic Limit for the Plan Year (the lesser of my includible compensation or $18,500). ____ I have determined that my elective deferral/salary reduction contribution does exceed the Basic Limit for the Plan Year (the lesser of my includible compensation or $18,500). But, I am utilizing the Age 50 Catch-up provision of $6,000 and I do not qualify for the special 15- year catch-up provision. ____ I have determined that my elective deferral/salary reduction contribution does exceed the Basic Limit for the Plan Year (the lesser of my includible compensation or $18,500). But, I am utilizing the Age 50 Catch-up provision of $6,000 and the special 15- year catch-up provision for the calendar year only and I understand that amounts in excess of the Basic Limit shall be allocated first to the 15-year catch-up.

Part 5. Designation of Funding Vehicle Contribution/ Pay Period

Service Provider/Advisor Name of Service Provider

1 2

___% $______ ___% $______

Name of Advisor

or or

Part 6. Employee Signature By signing below, I elect to become a Participant of the 403(b) Plan and agree to be bound by all the terms and conditions of the Plan. I understand my responsibilities as an Employee under the Plan, and I request that Employer take the action specified in this Agreement. I certify that I have read this complete Agreement and that my salary reductions do not exceed contribution limits as determined by Applicable Law. I understand that all rights under the annuity or custodial account established by me under the Program are enforceable solely by me, my beneficiary or my authorized representative. I understand that the Employer makes no representations as to the accuracy of MAC calculations or compliance with Applicable Law. I consent and agree that the Employer may adjust the amount reduced from my salary pursuant to this Agreement for my benefit if the Employer becomes aware of any error or reduction amount that may cause my MAC to be exceeded. Employee Signature Date

Part 4. Elective Deferral/ Salary Reduction (Check all that apply)

Part 7. Employer Signature

Initiate new salary reduction (Complete Part 5)

Employer hereby agrees to this Salary Reduction Agreement.

Change salary reduction (Complete Part 5)

Employer Signature

Change Funding Vehicle Service Provider (Complete Part 5)

Date

Discontinue salary reduction Please discontinue my TSA salary reduction with the following Service Provider:

Title .

Implementation Date: Salary reduction shall be implemented in accordance with the Employer’s administrative schedule and the terms of the 403(b) Plan. Specify Implementation Date: _______________________.

* Elective deferral limit for 2018; thereafter, deferral limits are indexed in $500 increments based on cost-of-living adjustments or as determined by the IRS.

Please note the Highland Community Unit School District No. 5 403(b) Plan does not allow for loans, hardship distributions or Roth 403(b) contributions. 161918_1.DOC

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