Peach State Reserves news [3rd quarter, July-Sept. 2008]

Good News!
Your Plan fees are going down
The Employees' Retirement System of
Georgia (ERS) continually seeks to discover enhancement opportunities that will benefit PSR participants.
ERS is pleased to announce that, effective January 1, 2009, Peach State Reserves (PSR) fees are being reduced. The change to the fee structure will make PSR more competitive in the marketplace and more affordable.
Fee Reduction: The current quarterly PSR participant recordkeeping fee of $12.50 is being reduced to $8.00. Participants with both a 457 and a 401(k)
account will continue to be assessed only one fee, charged to their 457 Plan account.
Lower fees keep more of your money in your account working for you. Consider matching the fee reduction with an increase in your contributions to give your account an even bigger boost. To increase your contribution, go to http://myGApsr.ingplans.com or call 1-866-694-2777.

In this issue
Plan News

THIRD QUARTER
2008
news

Afraid of Today's Market? Take the Emotion Out of Your Investing
A Word about Recent Market Events
Benchmarks & Indexes

Retiree Corner

More Good News!! Coming January 1, 2009: a unique retirement plan for new state employees
ERS is pleased to announce the introduction of the Georgia State Employees' Pension and Savings Plan (GSEPS), a new retirement plan for employees hired on or after January 1, 2009. Current members of the ERS retirement plan will have the option to transfer membership by "Opting In" to GSEPS starting in January. However, once done, the decision is irrevocable.
GSEPS creates a flexible retirement benefit by combining a traditional pension plan with a 401(k) plan. The 401(k) component of GSEPS includes an employer match (contribution) of up to 3%. A newsletter from ERS with more details will be sent to all current members this month. In addition, GSEPS informational meetings are scheduled throughout the state beginning October 27, continuing through December. A benefit forecast tool to help you compare the potential benefits of your current plan and GSEPS will be available at www.ersga.org in late October. For more information, go to www.ersga.org.

6 Investment Scams -- What to Watch Out For
I am a participant in the PSR 457 Plan. Will my 457 contributions be matched if I opt-in to GSEPS? No, current contributions to the PSR 457 will NOT be matched. If you complete an Opt-In Form and elect to contribute a percentage, you will be automatically enrolled in the 401(k) plan. Your 457 contributions will not change unless you change or stop your contributions.
I am a participant in the PSR 401(k) Plan. If I opt-in to GSEPS, will my current contributions automatically be matched? No. current contributions to the PSR 401(k) will NOT be matched. Current participants MUST complete an Opt-In Form and make a new contribution election as a percentage of salary.
The decision to opt-in to GSEPS should be given careful consideration. The GSEPS retirement plan is only offered to state employees, not

Making a change to your contributions? Effective November 28, 2008 at 4:00 p.m., if you wish to make a change to your PSR contribution amount, you need to indicate the change in 1% increments, rather than in dollar amounts.

National Save for Retirement Week October 19-25, 2008
Take time to secure your future -- National Save for Retirement Week is an effort
approved by Congress, to encourage Americans to save for retirement. This week is a perfect time to review your PSR account and to focus on things you can do now to achieve a brighter financial future.

First -- Review your goals and check your progress. Go online to http://myGApsr.ingplans.com
to review your account and use the online calculators to make sure you are on track to meet your retirement goals.
Consider increasing the amount you contribute each pay period. Plan contribution limits are $15,500 in 2008. And, participants over age 50 may be able to make catch-up contributions.

Access the Plan resources. Attend an educational workshop to learn
more about the Plan, savings strategies, and investing. A schedule is posted at http://myGApsr.ingplans.com.
Meet with a Plan Consultant to review your account and get answers to your questions. Call 1-866-694-2777, weekdays 8:30 a.m. to 5:00 p.m., or stop by Two Northside 75, Suite 300, in Atlanta.

Take action now! National Save for Retirement Week happens just once a year,
but the retirement savings strategy you set in motion this week could last a lifetime.

employees of the Community Service Boards, Georgia Lottery Corporation, Walton and Fayette County Boards of Education or the colleges included under the Board of Regents system (unless eligible to maintain ERS retirement membership with these employers).
New Plan Web site address:
http://myGApsr.ingplans.com
The PSR recordkeeper, CitiStreet, recently became part of ING, one of the world's largest and most respected financial institutions here in the US. Because CitiStreet is changing its name to ING, the Plan's Web site address is changing to http://myGApsr.ingplans.com. The prior Plan Web site address will still provide you with secure account access through 2009, as will the new URL. If you have questions, call the Plan Information Line at 1-866-694-2777.

Stable Value Fund Quarterly Range of Return
For the current quarter ending December 31, 2008, the projected range is expected to be between 4.0% and 4.75% annualized until the end of the quarter. The actual annualized rate of return for the previous quarter was 4.65%.

866.694.2777 http://myGApsr.ingplans.com

CustomSolutions FROM SMARTMONEY

Afraid of Today's Market?

Take the Emotion Out of Your Investing

We all know it's best not to let short-term market fluctuations influence your long-term investment decisions. So what can you do to keep your head?

Stick to your asset allocation.
For long-term investing success you should consider allocating your money among the different asset classes (stock, bond, and short-term funds) according to the mix of growth, income, safety and risk that suits you best. Once you have an allocation that works for you, stick to it. Don't make changes in response to short-term moves in the market. Make changes because something basic in your life has changed that leads you to reconsider the date you plan to retire (a marriage or divorce, the birth or adoption of a child).
Make the most of dollar-cost averaging.
Keep investing fixed amounts of money at regular intervals regardless of whether the market is up or down. Your money buys fewer shares when prices are high and at risk of falling, and more shares when prices are low and likely to rise. Consistently contributing to your retirement savings plan through regular payroll deductions makes dollar-cost averaging automatic.

Keep track of your investments.
Not every investment will work out as you hoped. If a fund has not lived up to your expectations over the long term or has consistently missed its benchmark, you may decide to sell your current holdings, reallocate future contributions, or do both. You will be making an informed decision.
Attend a workshop.
Check with your Plan about any opportunities to attend seminars to increase your financial knowledge, Taking time now to learn more about investing could pay off big when retirement rolls around.
Remember stock-market history.
When stocks are soaring, it's easy to think they'll soar forever; when they're down, it's easy to think they'll never go up. Don't focus on short-term ups and downs. Instead, keep your eye on the long-term.

A Word about Recent Market Events

When the markets get rough, some investors begin to question their investment strategies. Many think a decision to move out of the market may help them feel more in control. Others may even begin to wonder if their retirement savings are really protected in any way.

Market Volatility
The market activity this fall has been significant. Right now it's important to remember that market volatility is inevitable. Markets move up and down; trying to time the market is nearly impossible. Focusing on the future, maintaining a long-term strategy and ignoring short-term fluctuations is usually the wisest thing to do. This means staying on the path you identified for yourself when times were calmer, riding out short-term volatility, and waiting for better days to return.
Security of Your Retirement Savings
You should take comfort in knowing that there are regulations and government agencies in place to safeguard your retirement savings.
By government regulation, the money in your Plan is only used for the benefit of Plan participants and for the Plan's operational needs.

While government agencies can't guarantee the actual value of your investments, they do mandate rigorous regulations to keep your retirement savings as safe as possible. These safeguards, along with your own thoughtful investment practices, will help you to attain a more financially secure and comfortable retirement.

THIRD QUARTER 2008

retiree corner

Stay in Charge
Q What is a power of attorney? A A power of attorney is a document appointing someone to handle
your affairs if you cannot. Say you're planning a trip and will be away for 30 days. Several legal or financial matters may be pending. You would sign a power of attorney naming, say, your brother as your "attorney-in-fact" or "agent" to act in your absence.
Matters typically covered using a power of attorney include handling banking and securities transactions, entering into contracts, filing tax returns and buying or selling real estate. You most likely would revoke it once you returned home and could resume managing your affairs.
A durable power of attorney contains a special provision allowing your agent to make decisions for you if you become mentally incompetent and can't act on your own. It would stay in effect for as long as there are decisions to be made -- or until you regain your mental faculties.

Benchmarks
&Indexes
You want an aboveaverage performance from your retirement investments. But what's average?

Q What is the difference between a will and a living will? A A will only takes effect after your death -- distributing your assets
according to your wishes and naming someone a guardian for any minor children. There are many names for such a document, depending on the state in which you live. It might be called a living will, a health care power of attorney, or an advance directive.
A living will takes effect while you are still alive, spelling out the medical treatment you want and don't want, should you become incapacitated and unable to make your wishes known. It also states whether or not you want life-prolonging procedures performed on you.

Here are some key market benchmarks and indexes against which to measure performance.

Dow Jones Industrial Average This century-old benchmark, usually called "the Dow," is the world's most widely-followed market average. It's not representative of the whole universe of stocks -- it tracks only 30 large, well-known U.S. corporations. Use it only to guide you in the overall direction of the market.
S&P 500 From Standard & Poor's This benchmark is far more representative of the broader market, tracking 500 companies (not always the largest) chosen to reflect all sectors of the U.S. economy. Most professional investors, including mutual fund managers, measure success by whether or not they beat the S&P 500.

Russell 2000 It covers 2,000 small-cap stocks (companies with total stock market values of $5 billion or less). It's the benchmark against which the performance of smaller-cap mutual funds is measured.
MSCI EAFE That stands for Morgan Stanley Capital International Europe, Australasia, Far East. It measures some 1,000 stocks on 21 global stock exchanges. It's the benchmark against which international funds are measured.

Lehman Brothers Aggregate Bond Index It includes more than 5,000 government and corporate bonds. It's the yardstick against which bond-fund performance is measured.
Wilshire 5000 It tracks virtually all 7,000 U.S. stocks, making it a benchmark for the entire U.S. stock market.
Lipper Indexes Published daily by a research firm, Lipper tracks the performance of virtually all U.S. mutual funds by type, from growth funds to government Treasury funds.

Articles by SmartMoney and ING. Not intended to provide tax or investment advice.

CustomSolutions FROM SMARTMONEY
6 Investment Scams -- What to Watch Out For When the stock market is volatile, investors sometimes scramble for financial safe havens. Enter the con artist, pitching impossibly low-risk and high-return investment opportunities.
Investment fraud costs Americans billions of dollars each year, says the North American Securities Administrators Association (NASAA), a voluntary organization devoted to investor protection. The key to defending yourself from fraud? Education and awareness. NASAA's annual survey of state securities enforcement officials identified the investment scams you're likely to come across this year.

1 Ponzi/pyramid schemes. These swindles promise high returns to investors, but the only people who make money are the promoters who use cash from new investors to pay previous ones.
2 Senior investment fraud. These are frequently bogus interests in payphones, ATMs or Internet kiosks for sale. Investment seminars are typically get-richquick schemes for promoters who make money from admission fees and book sales. Life insurance policies may be bought from terminally ill patients for a percentage of the face value (viatical settlements). All of the scams on this list are often aimed at older adults, who may be most directly impacted by volatile stock markets and rising healthcare costs.
3 Promissory notes. Sometimes these short-term debt instruments are fraudulent, promising high returns, upwards of 15% a month, with little or no risk -- too good to be true.

5 Prime bank schemes. Scammers promise investors triple-digit returns through access to the investment portfolios of the world's elite banks. (Be suspicious of high-yield and/or international bank investments.)
6 Internet fraud. On message boards, cyber-swindlers may post "inside information" of a little-known company to spark interest and run up the stock price. Bogus chain e-mail letters may compel the unwary to open up their wallets. In all, online scammers bilk investors for hundreds of millions of dollars each year.
Sometimes an offer that appears too good to be true is too good to be true. State securities officials suggest that you call their offices to check a salesperson's licensing and background and the legitimacy of the investment he or she is selling. If the person or product is not registered, refuse the sale.

4 Affinity group fraud.

From bogus "gifting" programs at some churches to foreign exchange scams, crooks use their victims' religious or ethnic identities

* quarterly calendar

to gain their trust, then steal their life savings.

Don't Forget -- Daylight Savings Time ends on November 2, 2008!

Plan Information Line: 1.866.MY.GA.PSR (1.866.694.2777)
Plan Web site: http://myGApsr.ingplans.com
Field Office: Two Northside 75, Suite 300 Atlanta, GA Available MondayFriday 8:30 a.m.5 p.m.

In-state Plan Consultants: Richard Crippen, Plan Manager Kadir Edghill Kadrina Jackson Melanie Matabhik
This newsletter is not intended to provide legal, tax, or investment advice. For such advice, participants should contact their legal, tax, or investment advisors.
2008 ING. All Rights Reserved.

The New York Stock Exchange is closed on the following days: Thursday, November 27, 2008* Thursday, December 25, 2008* Thursday, January 1, 2009 Monday, January 19, 2009 Transactions made on these days will be processed the following business day.
* In addition, the New York Stock Exchange will close trading early (at 1:00 p.m. Eastern time) on Friday, November 28, 2008, and Wednesday, December 24, 2008.
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