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Deferred Compensation Plan FAQ's
HOW IT WORKS
What is the County's 457 Deferred Compensation Plan?
Why would I want to defer any of my salary
from the County?
Anytime. New employees may enroll anytime after receiving their first paycheck. Current employees may enroll anytime during the year. There is no specified enrollment period.
The minimum contribution is $20 each pay period.
The taxable income reported in the annual W2 form is reduced by the amount you deferred during the taxable year.
Yes. If you did not defer at the maximum levels in earlier years, you may, under certain circumstances, qualify to exceed the regular maximum in one or more of the three calendar years immediately prior to your attaining normal retirement age. The Treasurers Office can provide further assistance and can explain what age is considered normal retirement age, which varies for different types of employee groups.
You can increase, decrease, or stop your contributions at any time. If you stop contributing, you may restart at any time. See the section on forms to request the appropriate form.
The Plan currently is administered by Prudential Retirement Services, Inc., one of the largest defined contribution managers with over 70 years of retirement services experience.
Prudential does not charge any fees from participants for the administration of the program. However, the County of Alameda charges an administrative fee (currently $3.10 per month per participant) to defray the Countys cost for in-house Plan support services.
Participating in the Deferred Compensation Plan does not affect your ability to have an IRA. However, depending on your income and marital status, you may not qualify to deduct contributions to an IRA. Consult your tax advisor for more information.
No, you are entitled to exactly the same Social Security and County retirement benefits whether or not you join the Deferred Compensation Plan.
No, the County of Alameda does not make any matching contributions to your account.
To enroll, you must file Enrollment forms with the Treasurer's Office. Request a Deferred Compensation Plan Retirement Workbook from the Treasurer's Office. Follow the simple instructions, then return the completed forms to the Treasurer's Office.
The Enrollment forms must be completed accurately and received by Prudential before assets are accepted. If your form is incomplete, it will be returned to you for completion.
Yes. You can enroll and contribute to both a designated Roth after-tax source and a traditional pre-tax source in the same year in any proportion within the annual limit you choose. If you are already enrolled in the traditional pre-tax deferred compensation account you can add a Roth source using the Payroll Modification Form to designate your contributions.
The Deferred Compensation Plan may be better for a number of reasons. With deferred compensation, every dollar you contribute and earn is tax-deferred. With an IRA, your contributions may not be tax-deferred (consult your tax advisor). Another advantage of the Deferred Compensation Plan is that it makes saving automatic through payroll deductions, whereas an IRA requires a conscious decision and self-discipline to make deposits.
Deferred Compensation gives you a significant tax break because the program allows you to invest the full amount of your contribution, pre-tax. In conventional savings, there is no tax-deferral privilege, thus, your savings are essentially reduced by the taxes you have to pay on the taxable income.
It makes a huge difference. If you begin saving $100 each pay period today and earn an average of 8% annually, in 20 years youll have $123,862 available. If you wait five years to start, in 15 years your account would have only $73,492. Thats a $50,000 difference in your account. Over time, compounding of earnings contributes a significant amount to the growth of your savings.
You should contribute as much toward your retirement as you can afford, because every extra dollar you save will have an enormous impact over the long term. The Deferred Compensation Plan Retirement Workbook includes an exercise to help you determine how much you need to retire, and illustrates how compounding accelerates your money's growth from year to year and how tax-deferred investing beats taxable investing.GoalMaker" section of this website for more information. Also, review the detailed investment information in the Retirement Workbook.
Mutual funds are not insured against market fluctuations. They are insured against fraud and embezzlement.
The Treasurer and his Deferred Compensation Plan staff cannot give investment advice, but the Office provides you with the materials you need to make an informed decision. The ultimate decision lies with you as the investor. The local Prudential Representatives will provide you with personalized service if needed, including retirement planning.
Participants may obtain their statement through the Prudential website: http://www.prudential.com/online/retirement.
Participants can call Prudential Retirement Services to access their account balance, which is updated daily. Account balances may also be obtained through the Prudential website: http://www.prudential.com/online/retirement.
Quarterly account statements showing account balance, confirmation of transactions, and investment results are provided to participants by Prudential Retirement Services. Fund performance and prices may be obtained through the Prudential website: http://www.prudential.com/online/retirement.
Submit a Change of Name or Address Form or Beneficiary Designation Form to the Treasurers Office.
Unrestricted exchanges are allowed among the investment options, with the following exception:
Market timing, which is a type of excess trading, is the process of making frequent transfers into and out of the same fund over a short period. One or more "round trip" trades in the same fund within a 30 day period in which each buy and sell transaction is greater than $25,000 and where the trading pattern is not due to a systematic account rebalancing as part of a long term asset allocation strategy, payroll contribution, or other retirement planning activity. Any excessive trading can harm a fund's performance and the retirement security of long-term investors by increasing transaction cost and/or disrupting the portfolio manager's strategy.
All exchange requests are effective the same day that Prudential receives them, if received prior to 4:00 p.m. Eastern Time. Exchange requests received after 4:00 p.m. Eastern Time are processed the next business day. Your exchange is processed using closing market prices on the day your transaction is processed.
After each transaction, you will receive a written confirmation from Prudential. This will be mailed to your home address of record. This applies to transactions submitted by mail on the appropriate form, by phone, or on the Internet.
You may also contact Prudential Retirement Services or the Prudential web site to confirm transactions.
To discontinue or restart deferrals, submit a Payroll Modification form to the Treasurerís Office. Payroll modifications are effective the month following receipt by the Treasurer's Office and not less than two (2) pay periods.
Deferrals or changes to your payroll contributions are effective the month following receipt by the Treasurer's Office and not less than two (2) pay periods.
WITHDRAWING YOUR MONEY
The following conditions allow payout of benefits:
However, a special circumstance allows in-service withdrawal of funds, i.e., a financial hardship withdrawal. This type of withdrawal has strict qualifying requirements. The Treasurers Office will provide a financial hardship application if you need one.
Payment methods available are:
For more information, print a Payout Request form and Payout Instructions.
You must begin receiving benefit payments no later than April 1 of the calendar year following the year you reach 70 ½, or the year in which you actually retire, if later.
If you are thinking about leaving employment or if you have already separated, print the Payout Request Form (Distribution Election for Governmental 457 Plans) or Systematic Disbursement Form, and Payout Instructions. This packet of information includes general information and instructions regarding payout options and instructions/procedures for distribution of funds. You may request the forms and information from the Treasurer's Office.
If you do not want to take an immediate payout, choose the option, "I defer receipt of benefits until a later date" on the form.
In the event of your death, your designated beneficiary is eligible to withdraw your Deferred Compensation Plan benefits. Your beneficiary has 60 days to notify the Treasurers Office for when to begin payments.
No, you cannot withdraw your Plan assets while still employed.
You may only receive an in-service withdrawal due to a financial hardship caused by an unforeseeable emergency as defined by the IRS.
Yes, you can make an in-service withdrawal of funds from contributions rolled-over from an outside qualified plan.
The Internal Revenue Code now permits assets from a deferred compensation plan to be rolled over to a traditional IRA or Roth IRA. Also, you may transfer your assets in the Alameda County plan to another public agencys 457 Deferred Compensation Plan if that agencys plan accepts rollover assets.
Yes, you can apply for up to two loans at a time. This means that you can now borrow up to a combined maximum of 50% of your vested account balance (not to exceed $50,000 in any 12 month period). There is a $50 application fee for each loan with payments made via payroll deduction. General purpose loans may take up to five years to be repaid. Loans requested for purposes of purchasing a primary residence may take up to fifteen years to be repaid. It is important to note that there is a 12 month waiting period between loans and the sum of your loans. To learn more go to DCP Loan Program Q and A on ALCOWEB Document Center and/or call Prudential Retirement® at 855-969-4572 (855-wow-457b) and press 1
For more information see the Loan Policy located under the Information Section on the Treasurer-Tax Collector's Office Deferred Compensation webpage, http://www.acgov.org/treasurer/deferred.htm
FOR MORE INFORMATION
If you would like to:
Contact Linda Hulme in the Treasurers Office via phone at 1-510-272-6809 (tie line 26809) or 855-969-4572 (855-wow-457b) and press 2 or via email@example.com
If you would like more detailed information or specific account information, contact Prudential by one of the methods below.
Access account information through the Prudential website: http://www.prudential.com/online/retirement.
Note: To access account information, you will need your Account Number and User Personal Identification Number (PIN). Your Account Number is your Social Security Number. Call Customer Service to request a PIN number.
Local 457 Retirement Representatives
Mark Tomei - Financial Advisor
Please call 855-969-4572 (855-wow-457b) and press 3 to schedule an appointment.