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City of Portland 457 Deferred Compensation Plan

City of Portland 457 Deferred Compensation Plan. City of Portland 457 Deferred Compensation Plan. Presentation by: Jeanine Keller Deferred Compensation Administrator City of Portland. (503) 823-6140. What is Deferred Compensation ?. Voluntary Plan Save Money on a Pre-tax basis

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City of Portland 457 Deferred Compensation Plan

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  1. City of Portland457 Deferred Compensation Plan

  2. City of Portland457 Deferred Compensation Plan Presentation by: Jeanine Keller Deferred Compensation Administrator City of Portland (503) 823-6140

  3. What is Deferred Compensation ? • Voluntary Plan • Save Money on a Pre-tax basis • Allowed and Regulated by IRC Section 457 • Plan Document in Chapter 5.09 of City Code • Investment Decision - any investment involves some element of risk - meet with your representative to gain understanding of risk

  4. Deferral Amounts • Minimum: $10 per pay period • Maximum: $17,000 annually for 2012 • then cost of living in $500 increments

  5. Catch-up Provision TWO TYPES OF CATCH-UP • 1. 3 years prior to NRA • Available three calendar years prior to your Normal Retirement Age • Allows you to make up deferrals for prior years unused deferrals • Maximum age to apply is age 70-1/2 • 2. Age 50 and Over MUST COMPLETE APPLICATION FORM FOR BOTH TYPES OF CATCH-UP

  6. 3 Years Prior to NRA Twice the regular deferral dollar limit $34,000 in 2012 Cost of living increases in $1000 increments thereafter The maximum age to apply is age 70-1/2. Participants Age 50* and Over Additional deferrals, over the regular deferral limit of: $5,500 in 2012 Cost of living increases in $500 increments thereafter For a total maximum of $22,500 for 2012 *Age 50 anytime in calendar year Two Catch-up ProvisionsParticipant cannot use both features during the same year

  7. PERS Trustee to Trustee Transfer • Effective with retirements October 1, 2011 forward • PERS Tier 1 and 2 members can use deferred compensation funds to purchase waiting time, forfeited service time and other eligible purchases • www.oregon.gov/pers and print out a retirement benefit estimate request form and return it to PERS • PERS will send you a written estimate which will include your eligible purchases

  8. PERS Trustee to Trustee Transfer (Cont’d) • www.oregon.gov/PERS and print out a Trustee to Trustee Transfer form • Complete member section and take completed form and PERS retirement benefit estimate letter to your deferred compensation provider • Your deferred compensation provider will process the transfer of funds and send the check and forms to PERS • The receipt of funds can only be processed during the 90 days prior to your retirement date

  9. FINAL PAYCHECK PROVISIONS • As of August 1, 2010 forward, employees leaving employment can make an election of eligible final payout accruals to deferred compensation. • For example if you are leaving employment between September 1 and September 30, 2010, you can make a separate election based on your final payout accruals by completing a Participation Agreement form and returning it to the Treasury office by August 15, 2010. • IRS limits still apply.

  10. When is the Account Available? • Retirement or Termination of Employment • Unforeseen Emergencies • Voluntary In-Service Distribution • Death (keep beneficiary designation up-to-date)

  11. LEAVING CITY EMPLOYMENT • Leave money in Plan until future date • Start drawing on account • Transfer money to another qualified plan

  12. LEAVE MONEY IN PLAN • Allowed until age 70 1/2 • Continue to receive quarterly statements • Can move funds • Can change Investment Providers • Continue to accrue investment earnings

  13. Distribution Options From The Plan • Lump Sum / Partial lump sum • Systematic Withdrawal Option (SWO) - (dollar amount or number of years) • Annuities

  14. PLAN FLEXIBILITY • No 10% federal excise penalty for withdrawals prior to age 59 ½ • May transfer assets between current investment providers after retirement • May change payouts daily - increase, decrease, start, stop

  15. PORTABILITY (TRANSFER OF FUNDS) • Rollovers to qualified plans (traditional IRA, 403(b), 401, and government 457plans) are permitted • 457 assets rolled into a qualified plan become the assets of the new plan and may be subject to the IRS 10% early withdrawal penalty tax if distributed prior to age 59 ½ • 457 assets rolled to a non-457 plan may not be rolled back to a 457 plan • Take your time in deciding payout/transfer options.

  16. TAX INFO • Tax reporting and withholding as pension benefits • Reporting on Form 1099-R • Any pay-outs are subject to a mandatory 20% federal tax withholding if totally distributed in less than ten years • Consult with your tax advisor

  17. INVESTMENT PROVIDERS • ING Life Insurance and Annuity Company (503) 937-0378 • Advantis Credit Union (503) 785-2527

  18. ANY QUESTIONS?

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