Deferred Compensation

Under a deferred compensation plan, a flat dollar amount or percentage, that you determine, is deducted from your paycheck on a pre-tax basis. The amount of income that can be tax deferred is subject to IRS limitations.

Both federal and state income taxes are deferred on your deposits and interest/accumulation until you withdraw funds from your retirement account. Once distribution begins, the distributed monies are fully taxable as ordinary income for federal and state tax purposes. However, at retirement, most people will not have as much taxable income, so the tax rate is often less than the tax rate while the employee is working.

Employees may elect to participate in a Section 457 deferred compensation plan and employees may elect to participate in one or up to all four of the service providers for investment selection and fund administration.