457 Deferred Compensation Plan
Video: Your Questions Answered
A 457 Deferred Compensation Plan is a supplemental retirement savings program that allows the participant to make contributions before taxes are deducted. Contributions are handled through payroll deduction, reducing taxes each pay period.
With a 457 Plan:
- Participants reduce current income taxes while investing for retirement
- Earnings are tax-deferred until withdrawn
- It’s portable—contributions can be rolled into a new public sector Employer’s retirement plan.
- Nothing in the account is forfeited in the event of death. The designated beneficiaries receive the remaining funds.
The ICMA-RC Advantage for Plan Sponsors
- Excellent recruitment and retention tool
- Easy enrollment process
- Supplemental retirement plan that fits in with your defined benefit program
The ICMA-RC Advantage for Employees
- Contributions may be increased, decreased, stopped and restarted without restriction and without fees or penalties
- There are no restrictions or charges for participant reallocation of their investment mix and all funds offered through ICMA-RC are no-load.
- The most flexible payment options available. Employees determine the payment schedule that’s right for their lifestyle.
- Even while receiving benefits, participants still direct the investments of the remaining funds in their account. During retirement, the account has earnings potential.