Effective January 1, 2007, the Federal Income Tax Withholding Rates and Personal Exemption Allowance changed. Pensioners electing to have federal withholding tax calculated on their monthly pension benefit will realize a slight decrease in the amount of calculated federal tax withholding each month. A message was placed on the January checks advising of this change.

In addition, those pensioners turning age sixty during Calendar Year 2007 are not subject to State Income Tax Withholding on annual pension income amounts not exceeding $12,500.00 in accordance with State Income Tax Regulations. Those pensioners having state income tax calculated on their monthly pension benefit will realize a significant decrease in their monthly state tax withholding. In some cases, last month's state tax withholding will be eliminated as the pensioner's annual pension benefit income will not exceed $12,500.00.
As a result of the above activity, many pensioners will realize an increase in the Net benefit payment received for January.

	•RETIREES - GETTING READY TO PREPARE YOUR 2006 TAX RETURNS?
Your tax form 1099R will be mailed no later than January 31, 2007. In the event that you wish to change your current tax withholding, a Tax Withholding Election (TWE) form will be included for your convenience. Only submit this form if you wish to make a change.