Deferred Compensation - Section 457 - Pre-Tax
The City provides all benefited employees the opportunity to participate in a Section 457 Deferred Compensation plan. Deferred Compensation allows participants to defer a portion of their salary
on a pre-tax basis, for investment purposes. Empower Retirement
(Formerly Great-West) and ICMA-RC are the City's current Deferred Compensation Providers. Employees have a variety of investment options in all risk categories.
Deferred Compensation is not a savings account. Under IRS Section 457, distributions can only be made at termination, retirement, or unforeseeable emergency.
- The deferred compensation committee must review all unforeseeable emergency claims.
- The City MUST abide by IRS regulation or risk forfeiting the entire Deferred Compensation plan.
IRS Section 457 Plan Highlights
- Enrollment is continuous - participants can enroll, stop and change at any time.
- The minimum contribution is $10.00 per pay period.
- The maximum allowable contribution under the IRS for calendar year 2016 is $18,000 per year ($24,000 per year if employee turns 50 years or older in the calendar year).
- The City may contribute a specific amount for employees in certain bargaining units. If participant has a pre-tax and after-tax account, the City contribution will go towards the pre-tax account, unless the employee requests otherwise.
*Premiums for Long-Term Disability are paid out of the City's contribution to deferred compensation
- The City contribution for Executive, Elected Officials, Management I/II and Confidential employees is $75/month and employee must contribute at least $12.50 per pay period.
- The City contribution for IBEW Supervisory employees is $250/month and the employee must contribute at least $25.00 per pay period.*
- The City contribution for Fire-safety Management employees is $210/month and employee must contribute at least $25.00 per pay period. City contribution is $200/month, if enrolled in LTD.*
- The City contribution for Police-safety Management and Supervisory employees is $215/month and the employee must contribute at least $25.00 per pay period. City contribution is $200/month, if enrolled in LTD.*
- Balances in 457 accounts through previous employers may be
transferred to the City. Effective January 1, 2002, plans such as 401(a), 401(k), IRA and 403(b) are
compatible with 457s under the IRS code and can be rolled over to a
Deferred Compensation enrollment packets contain complete details of benefits and exclusions. The City of Riverside Human Resources Department,
Empower Retirement (Formerly Great-West) and ICMA-RC Member Services are also available to answer questions.
If you have additional questions regarding the 457 plan, please contact ICMA-RC Member Services at (800) 669-7400
or Empower Retirement at (800) 933-9808. Also, the Human Resources Benefits Division is available to answer benefit questions.