Death Benefit Claim (Page 13 of 13) in pdf

If you were born on or before January 1, 1936:

If you were born on or before January 1, 1936 and receive a lump sum distribution that you do not roll over, special rules for calculating the amount of

the tax on the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income.

If you are an eligible retired public safety officer and your pension payment is used to pay for health coverage or qualified long-term

care insurance:

If the Plan is a governmental plan, you retired as a public safety officer as defined by the IRS , and your retirement was by reason of disability or was

after normal retirement age, you can exclude from your taxable income plan payments paid directly as premiums to an accident or health plan (or a

qualified long-term care insurance contract) that your employer maintains for you, your spouse, or your dependents, up to a maximum of $3,000 annually.

If you are not a plan participant:

Payments after death of the participant. If you receive a distribution after the participant s death that you do not roll over, the distribution will generally

be taxed in the same manner described elsewhere in this notice. However, the 10% additional income tax on early distributions and the special rules for

public safety officers do not apply. The special rule described under the section If you were born on or before January 1, 1936 applies only if the

participant was born on or before January 1, 1936.

If you are a surviving spouse:

If you receive a payment from the Plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would

have had, as described elsewhere in this notice. In addition, if you choose to do a rollover to an IRA, you may treat the IRA as your own or as an

inherited IRA. An IRA you treat as your own is treated like any other IRA of yours, so that payments made to you before you are age 59½ will be

subject to the 10% additional income tax on early distributions (unless an exception applies) and required minimum distributions from your IRA do not

have to start until after you are age 70½.

If you treat the IRA as an inherited IRA, payments from the IRA will not be subject to the 10% additional income tax on early distributions. However,

if the participant had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA.

If the participant had not started taking required minimum distributions from the Plan, you will not have to start receiving required minimum

distributions from the inherited IRA until the year the participant would have been age 70½.

If you are a surviving beneficiary other than a spouse:

If you receive a payment from the Plan because of the participant’s death and you are a designated beneficiary other than a surviving spouse, the only

rollover option you have is to do a direct rollover to an inherited IRA. Payments from the inherited IRA will not be subject to the 10% additional

income tax on early distributions. You will have to receive required minimum distributions from the inherited IRA.

Payments under a qualified domestic relations order. If you are the spouse or former spouse of the participant who receives a payment from the Plan

under an approved domestic relations order (ADRO), you generally have the same options the participant would have (for example, you may roll over

the payment to your own IRA or an eligible employer plan that will accept it). Payments under the ADRO will not be subject to the 10% additional

income tax on early distributions.

If you are a nonresident alien:

If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is generally

required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you

do a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN for claiming

that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide

for Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. If you live in a state that mandates state income

tax withholding, state taxes will be withheld on payments made directly to you. Refer to the instructions accompanying your plan distribution form for

more information.

Other special rules:

If a payment is one in a series of payments for less than 10 years, your choice whether to make a direct rollover will apply to all later payments in the

series (unless you make a different choice for later payments).

If your payments for the year are less than $200, the Plan is not required to allow you to do a direct rollover and is not required to withhold for federal

income taxes. However, you may do a 60-day rollover.

You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces

Tax Guide.

FOR MORE INFORMATION

Neither VRS, the plan sponsor, nor ING Institutional Plan Services, the plan recordkeeper, gives legal or tax advice. You may wish to consult with a

professional tax advisor, before taking a payment from the Plan. Also, you can find more detailed information on the federal tax treatment of payments

from employer plans in: IRS Publication 575, Pension and Annuity Income; IRS Publication 590, Individual Retirement Arrangements (IRAs); and IRS

Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are available from a local IRS office, on the web at , or

by calling 1-800-TAX-FORM.

ING_VRS_Death

Page 8 of 8 Guide

Benefit Claim_12.30.10