Deferred compensation is a voluntary defined contribution retirement plan established by the State to help employees supplement their retirement income. Deferred compensation reduces income taxes while helping retirement savings grow. This is how it works:
- The employee decides how much money they want to defer.
- The amount is automatically set aside from the employee's pay warrant and invested for the employee in the investment options chosen by the employee.
- The contributions and any earnings that accumulate are not taxed until they are distributed to you. This is usually at retirement when you may be in a lower tax bracket.
- The employee pays no up-front administrative charges or annual fees, so 100% of the employee's contribution is invested in the employee's account.
- The employee may defer a minimum of $11.54 per biweekly pay period or a maximum of the lesser of 25% of taxable income or $7,500.
The Plan is a voluntary plan available to all employees of the State, including individuals performing services by appointment or election for which compensation is paid. It is also available to employees of cities, counties, towns and other municipalities that have adopted the State Plan.
There are no age or length of service requirements.
To receive more information regarding Deferred Compensation please use the contact information below: