SUPPLEMENTAL RETIREMENT PLAN

Dear USDA/ESRA Member:

We are pleased to announce that under our Supplemental Retirement Plan you, your spouse and certain family members are eligible to save for the future with three well-known types of tax-advantage investments:

Individual Retirement Annuities
• Traditional IRA
• Roth IRA

Non-Qualified Deferred Annuity (NQDA)

Your fixed investment in an IRA or NQDA can give you the power of tax-deferred growth. Taxes on all interest are deferred until withdrawal, which means that all of your money remains in your account to accumulate over time through compounding. Annuities are long-term investments, so be aware that federal restrictions and tax penalties can apply to early withdrawals. If you are already retired, please call 1-800-791-6840 to discuss all of the annuity investment options.

The fourth quarter fixed-interest rate is 4.5% for deposits of $20,000 or more or 4.0% for deposits up to $20,000. This rate is guaranteed through December 31, 2005 on all deposits received in the fourth quarter. VALIC also intends to pay this rate on those deposits for one additional calendar year. The contractual minimum guaranteed interest rate is 2.00%. Guarantees are backed by the claims paying ability of The Variable Annuity Life Insurance Company (VALIC) provider of the investment program.

Other Plan highlights include:
• No administrative or transaction fees
• Members and their spouses, children, parents, grandparents and
grandchildren are eligible
• Contributions are made any time during the year.

Please review this Supplemental Retirement Plan with your accountant, attorney or financial advisor before you make a decision to invest in another retirement plan. You’ll find more details in the following pages.

If you have any questions after reviewing this material, please call Mass Benefits toll-free at 1-800-791-6840.

WHAT IS THE SUPPLEMENTAL RETIREMENT PLAN?

The Plan permits you to voluntarily establish your own Individual Retirement Account (IRA: Traditional and Roth) and/or Non-Qualified Deferred Annuity Account (interest accumulates on a tax-deferred basis). Once received, your contributions are placed with The Variable Annuity Life Insurance Company (VALIC) at the then prevailing rate. As a participant you will receive quarterly statements.

WHO IS ELIGIBLE?

All USDA/ESRA members, their respective spouses, and the following family members: grandparents, parents, children over age 21 (natural, adopted and stepchildren), and grandchildren over age 21 and their respective spouses are eligible to participate in this Plan. Call Mass Benefits for the family member enrollment forms.

WHAT IS THE MINIMUM CONTRIBUTION AND COST TO PARTICIPATE IN THIS SUPPLEMENTAL RETIREMENT PLAN?

The minimum contribution amount is $30 and there are no administrative fees.

WHY WAS VALIC SELECTED?

VALIC has a history of outstanding investment performance and is a leader in the industry with half a century of experience, assuring us of both expertise and unquestioned reliability. VALIC has earned the highest financial strength ratings from Standard & Poor’s (AAA) and A.M. Best (A++). Ratings apply to the claims paying ability of the insurance company, not to the safety or performance of the investment options.

WHAT IS THE RETURN?

For contributions credited during 2005, an interest rate will be declared each quarter and contributions received and credited during a particular quarter are guaranteed to receive that interest rate until December 31, 2005. It is VALIC’s intent to pay that rate for another calendar year. At the end of that year, an annual rate is declared that will never earn less than 2%. Your contributions begin to earn interest upon receipt by VALIC.

WHAT ARE IRS PENALTIES FOR PREMATURE DISTRIBUTION?

Generally, distributions received prior to age 592 that are not due to death, disability, transfer or rollover are subject to a 10% Penalty Tax as follows: (1) Traditional IRA - on the full amount withdrawn; (2) Non-Qualified Deferred Annuity - on interest earnings only. (3) Under a Roth IRA, some withdrawals may be penalty-free and some may even be tax-free. However, the combination of several factors, including your age, whether the account has been open for at least five tax years affect the taxability of your Roth IRA
Consult your tax advisor for more details.

You may purchase an annuity based on your life expectancy prior to age 592 and no penalties will be imposed.

WHAT IS THE SURRENDER CHARGE FROM THE FUNDING CARRIER FOR PREMATURE DISTRIBUTION?

Cash surrender or withdrawal charges will apply to surrenders or withdrawals in excess of 10% of the account value. The charge is 5% of either the amount withdrawn in excess of the 10% free withdrawal amount, or the amount of any purchase payments received during the most recent 60 months prior to the surrender or withdrawal, whichever is less.

The charge will not be assessed if you:

• Elect an annuity income option
• Should die
• Become disabled
• Elect systematic withdrawals in equal installments over a five-year period.

ENHANCED PLAN FEATURES

You may withdraw up to 10% of your accumulated account value once per year without a surrender charge.

Each lump sum contribution of $20,000 or more per participant will be credited with an additional 0.50% of interest (fourth quarter enhanced rate is 4.50% - basic rate is 4.0%). This rate is subject to change annually.

Minimum CONTRACTUAL Guarantee for the Supplemental Retirement Plan is 2.0%.

Stated interest rates are the effective annual rate. Daily compounding rates are used to equal the rate.

INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)

The tax laws passed in 1997 and 2000 have added additional types of IRAs, and increased the phase-out amounts for deductibility purposes.

The maximum contribution amount in 2005 is $ (all IRAs combined) or 100% of earned income up to $4,000. If you turn 50 or older in 2005, you may make an additional “catch-up” contribution of $500. This is a combined maximum for all Traditional and Roth IRAs you hold.

TRADITIONAL IRA - All or part of your contributions may be deductible. The determining factors for deductibility are the income restrictions and eligibility to participate in employer-sponsored qualified retirement plan. The Adjusted Gross Income (AGI) limit for single filers is phased out between $50,000 and $60,000 in 2005, and between $70,000 - $80,000 for those married and filing jointly.

ROTH IRA - Contributions are non-deductible. Earnings, however, are tax-free provided the account has been open at least five tax years and you are at least 592 when you begin withdrawals. The availability of this type of IRA is phased out according to your AGI: for single filers, $95,000 to $110,000; for joint filers, $150,000 to $160,000.

IRA contributions can be made for tax year 2005 until April 15, 2006 or until your 2005 tax return is filed (excluding filing extensions). If any portion of your Traditional IRA contribution is nondeductible, you must file Form 8606 with your tax return.

Under the Supplemental Retirement Plan you may roll over your accumulated balance in a qualified retirement plan to a Traditional IRA without tax consequences. You may also transfer or roll over a Traditional IRA into another Traditional IRA, or a Roth IRA. You may transfer a Roth IRA to another Roth IRA. You should be certain that you understand the tax consequences before executing any transfer.

You must cease making contributions to Traditional IRAs in the year in which you reach 702. Minimum required distributions must begin by April 1 of the year following the year in which you attain age 702. For Roth IRAs there is no age limit for contributions or withdrawals

NON-QUALIFIED TAX-DEFERRED ANNUITY

If you wish to make contributions greater than those permitted under IRA regulations, or if you are not eligible to establish a deductible IRA, you may want to participate in the Non-Qualified Deferred Annuity (NDQA) portion of the Supplemental Retirement Plan and have all of the advantages of this tax-deferred annuity plan for your retirement planning.

There are no limitations on contributions.
You may contribute as much as you wish at any time.

Contributions are not tax deductible. However, interest earnings will accumulate on a tax-deferred basis -- that is, no taxes will be assessed until earnings are withdrawn. Withdrawals are processed from interest first. (IRS Regulations).

IRS reporting requirements do not oblige you to indicate contributions to or current interest earnings on a NDQA on your Form 1040, since that is done at time of withdrawal.

There are no maximum age limitations for contributions or withdrawals.

If you have any questions, please call Mass Benefits Consultants, Inc. toll-free
At 1-800-791-6840.

TO ENROLL:

1. Complete the Member & Spouse Enrollment Form
(Family members complete the Family Member Form.)

2. Make your check payable to: USDA/ESRA SRP
Make sure your Social Security number and the
letters USDA/ESRA appear on your check.
(A $25.00 service charge will be assessed on all returned checks.)

3. Mail with your ENROLLMENT FORM and check to:

USDA/ESRA SRP Plan Administrator
Mass Benefits Consultants, Inc.
P.O. Box 828
Annandale, VA 22003-0828