How is the Earnings Enhancement calculated?

The actual amount of the Earnings Enhancement is calculated by multiplying the annual deposits to an account by the Earnings Enhancement rate applicable to the account category.

For account Categories I, II and III, the Earnings Enhancement rate is based on the account owner’s reported federal adjusted gross income (AGI) for the preceding taxable year (the AGI for tax year 2010 will be used to calculate Earnings Enhancements for 2011 deposits), according to the following schedule: Reported AGI Rate Earnings Enhancement $0 to $29,999 14% $30,000 to $44,999 12% $45,000 to $59,999 9% $60,000 to $74,999 6% $75,000 to $99,999 4% $100,000 and above 2%

For account Category IV the Earnings Enhancements are based on the two percent (2%) rate.

For account Category V, no Earnings Enhancement is paid.

For account Category VI, the Earnings Enhancements are based on the federal AGI reported for the previous year by the beneficiary’s family and are paid to the same rate schedule as used for account Categories I, II and III.

For account Categories I, II, III and VI that do not provide documentation of the federal AGI, the Earnings Enhancements are based on the two percent (2%) rate.

Earnings Enhancements are awarded annually and posted to individual accounts as of December 31 of each year.