457 DEFERRED COMPENSATION PLAN

Overview

A 457 Deferred Compensation Plan is a supplemental retirement savings program that allows you to make contributions on a pre-tax basis. Federal, and in most cases, state income taxes are deferred until your assets are withdrawn, usually during retirement when you may be in a lower tax bracket.

City of Long Beach 457 Plan

The City currently offer’s a 457 plan from ICMA:

City of Long Beach Deferred Compensation Plan.

What are the benefits of participating in a 457 plan?

• You reduce your current income taxes while investing for retirement.
• Your earnings accumulate tax-deferred.
• You may be allowed to make additional “catch-up” contributions if you are 50 (or older) or within three years of your normal retirement age and already contributing the maximum to your plan.
• If you change jobs, you have the flexibility to move your account into your new Employer’s retirement plan.
• If you retire or leave service early, there is no penalty for withdrawals.

How much may I contribute?

You may defer each year a maximum of 100% of your “gross compensation”* or an annual dollar limit, whichever is less. The dollar limits are:

Can I make “Catch-Up” contributions?

Yes, the plan offerS two “Catch-Up” provisions allowing you to contribute greater than the normal annual maximum contribution amount.

The “Age 50 Catch-Up Provision” allows you to contribute an additional annual amount when you reach age 50 or older. This additional contribution is not dependent on your prior year’s deferrals to any 457 deferred compensation account with your existing employer. The “Age 50 Catch-Up” limits are

The “Normal Catch-Up Provision” allows you to make up for eligible contributions not deferred to an existing 457 plan with your current employer in prior years, permitting up to double the normal maximum annual contribution in effect for that year.

Stay the Course!