457(b) Deferred Compensation Plans
Eligible employees of the Community College of Rhode Island may choose to participate in a deferred compensation plan over and above their regular retirement plan. Since this plan is tax-deferred, salary reduction contributions and earnings are taxable as income when you receive them. Most state and local taxes are also deferred until benefits are received. When you elect to participate, a portion of your salary is set aside (on a pre-tax basis) to save toward supplementing your primary retirement plan and social security.
The maximum annual contribution limit is determined by the IRS each year. If you are age 50 or older, you can contribute an additional catch-up contribution amounts. The minimum contribution to a 457(b) plan is $25.00 per pay period.
With a 457(b) account, loans are not available. Hardship withdrawals are more difficult to obtain, and if upon termination you decide to withdraw your money before you are 59½, there is no penalty. You will, however, pay all income taxes on the amount withdrawn.
457(b) accounts are available through VALIC, VOYA (formerly ING), and Teachers Insurance and Annuity Association (TIAA/CREF). Each of these carriers offers a variety of investment options from which to choose.
You can enroll at any time and you can change your contributions at any time. Employees may contact the Office of Human Resources for more information.
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