What is a 457 deferred compensation plan?_
A 457 deferred compensation plan is a retirement plan that allows you to make contributions into an account established on your behalf. Your contributions are made on a pre-tax basis, and all earnings are tax-deferred. The amounts accumulated on your behalf are distributed at retirement, or due to another qualifying event, such as separation from service or death.
Unlike pre-tax elective deferral contributions, designated Roth contributions are currently includible in gross income. Designated Roth contributions are treated the same as pre-tax elective contributions for most purposes, including the annual contributions limits. In addition, a 457(b) plan that has a Roth account feature may permit a participant or spousal beneficiary who has a distributable event to directly roll over eligible amounts to the plan's Roth account.
What is the maximum amount I can contribute to the 457(b) Plan?+
Under the Plan, the maximum annual contribution amount is set by the Internal Revenue Service (IRS) based on annual cost of living adjustments. You may view the current limits below.
|2016||$18,000 regular limit
$24,000 Over 50 Catch-up Limit ($6,000 over the regular limit)
$36,000 Normal Retirement Age catch-up limit (Double the regular limit)
* Amount available under the NRA Catch-up is based on your prior contribution history. Contact your local Voya® representative for a calculation to determine how much you may contribute under the NRA Catch-up.
Participants may be able to contribute amounts in excess of the applicable contributions limits if they are eligible for one of two catch-up provisions under the Plan.
You must elect catch-up by completing the City’s catch-up application. To elect the special section 457(b) catch-up provision, please contact our Retirement Readiness Service Center (call center) at (800) 584-6001.
If you are eligible for both catch-up options, IRS rules say you cannot use both in the same year, but you are allowed to use the option that lets you defer the greater amount. For additional information on the 457 catch-up provisions or the annual contribution limits, please view a brochure on 457 contribution limitations.
How do I increase or decrease my contribution to the 457(b) Plan?+
In order to change your contribution amount, you will need to complete a Participation Agreement. This is necessary to authorize payroll deduction for the new amount. To receive this form, you must call your local Voya representatives.
When am I vested?+
Your voluntary contributions are automatically 100% vested immediately upon joining.
Can I roll over other eligible retirement assets into the 457(b) Plan?+
Yes, if the plan(s) permit. Rollovers are permissible given that they are rolled over from other eligible 401(a)/(k) 403(b), another governmental 457(b) plan, or a traditional IRA. Please refer to the Plan document for further information pertaining to rollover amounts from other plans. If the plans permit, generally, all distributions are eligible for rollover except for:
- Amounts distributed for an unforeseeable emergency withdrawal;
- IRS required minimum distributions payable on or after you attain age 70½; and
- Periodic payments made over your life or a specified period of 10 years or more.
Please note: Amounts rolled into a governmental 457(b) plan from another plan type would remain subject to the IRS 10% premature distribution penalty tax if distributed prior to age 59½, unless an IRS exception applies.
Voya does not offer tax or legal advice. You should consult with a tax advisor and /or tax attorney concerning your personal situation before making a financial / investment decision.