Clackamas County 457 Deferred Compensation Plan
Below are the important features about the plan. This website is intended to be a summary of the plan provisions. In the event that a conflict exists between the information contained within this website and the plan document, the plan document provisions prevail. For more information, please contact your local financial professional.
Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here.
Contributions under the Plan are made by participants through a reduction in salary. A minimum contribution of $13 per pay period is required. Contributions may be made by the Employer as specified under the terms of the Plan document. You may be eligible for increased contributions under one of two catch-up provisions:
- During the three consecutive years prior to attaining Normal Retirement Age under a special section 457(b) catch-up provision.
For purposes of the special section 457(b) catch-up provision, the Normal Retirement Age (NRA) cannot be earlier than the earliest age you are eligible to retire under the County's pension plan in which you are a member and receive immediate unreduced retirement benefits (or, if you are not a participant in a pension plan, not earlier than age 65). NRA cannot be later than age 72. Your NRA will differ depending on whether you are a member of Public Employees Retirement System (PERS); Fire and Police Disability and Retirement Fund; or Oregon Public Services Retirement Plan (OPSRP).
- On and after you attain age 50 under an age 50+ catch-up provision.
Note that you may not use the age 50+ provision and the special 457(b) catch-up provision during the same calendar year. You must select the provision which provides the higher contribution amount.
To learn more about this feature or to elect a catch-up provision, please contact your local Voya® financial professional at (503) 937-0363.
The Plan is a voluntary plan available to all employees of Clackamas County or Clackamas County Housing Authority (Employer) who are regularly scheduled to work at least twenty (20) hours per week, or for at least eighteen and three-quarters (18.75) hours in a Job Share status, for twelve (12) months per year. In addition, eligible individuals include any elected official, and any individual performing services for the Employer as an independent contractor or pursuant to an Employment Agreement, who performs services for the Employer for which Compensation is paid.
Timing of Distributions
The IRS requires that distributions under a 457(b) plan begin no later than the April 1st of the calendar year following the calendar year in which you attain age 72 or separate from service, whichever occurs later. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not timely distributed. These rules are referred to as IRS Required Minimum Distribution requirements (RMD).
After you have severed employment and would like to select a benefit payment option, please initiate it online or call the Service Center at (800) 584-6001 for further assistance.
When you are entitled to a distribution of benefits under the Plan, you can choose from any (or a combination) of the payment options described below:
- Periodic payments of your account over a specified period or for a specified amount
- Rollover into another Eligible Plan
Your distribution can be rolled over into an eligible 401(a), 401(k), 403(b) or another government 457(b) plan or a traditional IRA. Amounts rolled from the 457 plan to another plan type (e.g., 401, 403(b), etc.,) would become subject to the IRS 10% premature distribution penalty tax if distributed prior to age 59 ½ (unless an IRS exception applies).
Carefully consider the provisions of your current retirement plan and those of previous retirement plans for differences in: cost benefits, surrender charges or other important features before transferring assets. Consult your own legal and tax advisor regarding your personal situation before making investment related decisions
All distributions are eligible for rollover except for: 1) amounts distributed for an unforeseeable emergency withdrawal; 2) IRS required minimum distributions payable on or after you attain age 72; and 3) periodic payments made over your life or a specified period of 10 years or more.
- Postpone any decision on benefit payments until a later date
- Lump sum, or partial lump sum distribution
- Take all or a portion of your account balance in cash
- Annuity Options - choose from a variety of annuity options including a joint and survivor annuity, life annuity and life annuity with period certain
In the case of divorce, the court may issue a Domestic Relations Order providing that your account is to be split and payment made to an alternate payee. If this happens, Voya will review your domestic relations order to determine whether it satisfies the Plan and IRS requirements for a qualified domestic relations order (QDRO). The alternate payee is entitled to elect immediate distribution of the amounts awarded under the QDRO. A spousal alternate payee is also eligible to rollover amounts awarded to another eligible retirement plan in which he or she participates.
To obtain additional information and an instruction package, please contact Customer Service at (800) 584-6001.
Beneficiary Designation and Death Benefits
You are permitted to designate a person or persons to receive payment of benefits in the event of your death. You designate a beneficiary (or make changes to your previous designation) by accessing your account online. You may also call your local Voya financial professional at (503) 937-0363 or Service Center at (800) 584-6001 for further assistance. Upon your death, benefits would be payable to the beneficiary(ies) that you designated under the Plan. If you have not designated a beneficiary, payment of death benefits will be made in accordance with the terms of the Plan. Your beneficiary will be entitled to select from a variety of payment options, which are generally the same options that would have been available to you. Your beneficiary will need to call Voya for validation of beneficiary and appropriate paperwork.
All of the payments you receive from the Plan are subject to Federal and state income taxes. Federal income tax withholding will apply to your payments, as described below, based on whether you are eligible to rollover the distribution.
- If you receive a distribution that is eligible to be rolled over, a mandatory 20% will be withheld for Federal tax purposes at the time payment is made to you.
- If you receive a distribution that is not eligible to be rolled over, 10% Federal tax will be withheld at the time of payment. However, you may elect to have no withholding withheld.
Amounts distributed from a 457(b) plan are not subject to the IRS 10% premature distribution penalty tax if distributed prior to attaining age 59½. However, if you have previously rolled over amounts from a plan (including a traditional IRA) other than a government 457(b) plan, such rollover amounts will be subject to this IRS 10% premature distribution penalty tax if distributed prior to attaining age 59½, unless an IRS exception applies. IRS exceptions include payments made:
- Upon your severance from employment/retirement on or after you attain age 55;
- In substantially equal amounts over your life/life expectancy;
- As a result of your total and permanent disability;
- To your former spouse as an alternate payee under a qualified domestic relations order; or,
- To your beneficiary as a result of your death.
Voya does not offer legal or tax advice. Please seek the advice of your own legal or tax advisor prior to making a tax-related investment decision.
Unforeseeable Emergency Withdrawals
Internal Revenue Code Section 457(b) defines an unforeseeable emergency as a severe financial hardship to the participant or the participant’s beneficiary (collectively referred to as the "account holder") resulting from:
- An illness or accident involving you, your beneficiary, the spouse of you or your beneficiary or a dependent (as defined by the IRS) of you or your beneficiary;
- The loss of your or your beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance, such as a result of a natural disaster); or
- Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your or your beneficiary’s control.
Even if the account holder meets the above requirements, this does not mean that he/she will be able to withdraw funds from the Plan. Withdrawals are permitted only to the extent the hardship cannot be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidating your assets (to the extent this would not itself cause severe financial hardship); or 3) by stopping deferrals under the Plan. Also, participants will not be allowed request an unforeseeable emergency once a distribution has begun.
Situations that may constitute unforeseeable circumstances include:
- The imminent foreclosure of or eviction from the participant’s or beneficiary’s primary residence.
- The need to pay for medical expenses, including non-refundable deductibles, as well as the cost of prescription drug medication.
- The need to pay for the funeral expenses of a spouse or dependent (as defined by the IRS). Only the amount reasonably necessary to meet the emergency need is available for withdrawal.
Contributions under the Plan will be suspended for a 6-month period beginning with the date the request for an unforeseeable emergency withdrawal is approved.
Loans are not available under the plan.
Not FDIC/NCUA/NCUSIF Insured I Not a Deposit of a Bank/Credit Union I May Lose Value I Not Bank/Credit Union Guaranteed I Not Insured by Any Federal Government Agency
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