Union of Poles in America - ADVANTAGES TO UPA MEMBERSHIP

ADVANTAGES TO UPA MEMBERSHIP

There are two important advantages to Members whose invest through UPA in this annuity program. The first is return on investment. The second is tax deferral.

The current investment return is 5%. Where else can a Member receive a comparable rate of return on a tax-deferred basis? The following chart shows some alternatives currently available to Members:

Type of investment	Rate of return	Disadvantage

Passbook savings account	2%	taxable annually
Certificate of Deposit	3%	taxable annually
Municipal bond	3.5%	brokerage fee
Corporate bond	4.5%	brokerage fee and taxable annually
Money market	1.5%	taxable annually

All these rates are subject to fluctuation. The ANN-2001 return also varies, but it has a minimum guarantee of 3% annual return no matter what is happening to the investment market at the time.

The second advantage is tax deferral. As the ANN-2001 account grows, the Member does not have to pay any federal or state income tax until the pay-out period begins.

The chart in Exhibit I shows exactly how $1,000, invested every year, can grow to about $100,000 in just 32 years, if interest rates stay at the current 5% level.

If a Member elects to withdraw any money in a lump sum, before having left it on deposit at UPA for seven years, he or she forfeits a part of the accumulated value. The contract explains these terms clearly. If a Member elects to withdraw any money in a lump sum within five years, he or she may also incur a tax liability for which he or she should seek competent legal counsel.