401(a) Retirement Plan<br />457(b) Deferred Compensation Plan: For DC Government Employees

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    DC Employee Plans

    You may participate in both the 401(a) Retirement and 457(b) Deferred Compensation Plan. Both plans work together to help you build a secure retirement.


    How your 401(a) Retirement Plan works:

    Contributions are made by the District to an account in your name for the exclusive benefit of you and your beneficiaries. The value of the account is based on the contributions made and the investment performance over time. No taxes are due, including on earnings, until you make withdrawals.

    The 401(a) Retirement Plan is only one part of a total retirement program that includes Social Security and the voluntary 457(b) Deferred Compensation Plan.

    Eligibility

    District employees (except Police Officers, Firefighters, Teachers and Civil Service Retirement System employees) who were hired for the first time on or after October 1, 1987, are automatically enrolled in the Plan after completing one year of creditable service.

    Contributions

    Under the plan, the District will contribute an amount equal to 5% of base salary (5.5% for detention officers) annually.

    • Contributions are made each pay period based on the employee's pre-tax base salary (excluding overtime, holiday, and Sunday compensation).
    • No employee contributions: An employee cannot make any contributions to his or her Plan account; however, rollover contributions are allowed.

    Investments

    You control how your account is invested. Choose from a number of investment options selected for you by the District.

    Your plan includes a wide range of options, from more conservative stable value funds to more aggressive bond and stock funds. You may choose to build a diversified portfolio of various funds or select a simple yet diversified age-based retirement fund that is geared toward your projected retirement date. These funds may be a good alternative for investors who are not comfortable actively managing their account. You also have the option to rely on specific investment advice through our managed accounts program - Guided Pathways®.

    Before making any investment decisions, please read the prospectus and/or fund fact sheets carefully.

    • To review investment options for your plan go to Funds.
    • To learn more about investing for retirement, visit www.icmarc.org/invest.

    Vesting

    "Vesting" refers to a participant's right to recive the account balance held on his or her account when he or she no longer works for the District. The account will become fully vested under the following circumstances:

    • Prior to December 8, 2009, completion of five years of creditable service in covered employment,
    • Effective December 8, 2009, graded vesting is based on the following schedule:

      Years of Creditable Service Percentage of Your
      Account that Is Vested
      Less than 2 0%
      2 20%
      3 40%
      4 60%
      5 or more 100%
    • permanent disability, or
    • death while employed.

    If an employee leaves District employment before his or her account is vested, he or she forfeits the account balance.

    Note:The final vesting percent will be determined by D.C. Human Resources after a review of your employment history.

    Survivor Benefits

    You designate a beneficiary, or beneficiaries, to receive any remaining assets upon your death. Designating beneficiaries can help ensure your assets are paid per your wishes, avoid the potential costs and delays of probate, and allow non-spouse beneficiaries to receive additional tax benefits.

    Note: If you are married, you are required to name your spouse as your primary beneficiary for100 percent of your account unless your spouse waives this right.


    How your 457(b) Deferred Compensation Plan works:

    Your voluntary tax-deferred contributions are made to an account in your name for the exclusive benefit of you and your beneficiaries. The value of the account is based on the contributions made and the investment performance over time.

    The 457(b) Deferred Compensation Plan is one piece of your retirement program designed to supplement your retirement savings. While a pension and/or Social Security may go a long way, they may not be enough. Saving to your 457(b) plan can help you maintain your desired standard of living.

    Eligibility

    You are eligible to participate if you are a District employees who is:

    • in an agency under the personnel authority of the Mayor,
    • in a subordinate agency as defined in the Comprehensive Merit Personnel Act of 1978 and
    • if approved by the Mayor, an agency not under the personnel authority of the Mayor or an independent agency.

    There are no age or length of service requirements.

    Contributions

    Under the plan, you make contributions to the Plan by agreeing to defer a dollar amount of your salary. Your deferrals are made on a pre-tax basis, and all earnings are tax deferred until benefits are distributed to you. The District does not make any contributions to this plan.

    • The minimum contribution is $20 per biweekly payroll period, or $43 per monthly payroll period.
    • Maximum contribution is set by the IRS and is subject to cost-of-living adjustments every year.

    For 2016 and 2017, you can contribute up to $18,000 annually, up to $24,000 if you are age 50 or over, or up to $36,000 if you qualify for pre-retirement catch-up contributions.

    Roth Contributions

    What are Roth contributions?

    • Contributions that you make to your 457 Plan on an after-tax basis. Pay taxes on contributions now, rather than later. (You may make Roth and pre-tax contributions for a combined total of no more than $18,000 per year.)
    • May be most appropriate for participants who expect to be in a higher tax bracket in retirement. (If your income is higher when you retire, and you wait to pay taxes - you could wind up paying more in taxes.)
    • Invested five years and age 59½ to avoid penalties.

    What are benefits of making Roth contributions?

    • Tax-free withdrawals: Qualified withdrawal of Roth assets are not subject to taxes.
    • Tax planning: Having pre-tax and Roth options allows you to choose the option that best fits your lifestyle. The Roth Analyzer can help you figure out which is best.
    • Compared to Roth IRAs - 457 participants have higher contribution limits; all income levels are eligible.

    Investments

    You control how your account is invested. Choose from a number of investment options selected for you by the District.

    Your plan includes a wide range of options, from more conservative stabel value funds to more aggressive bond and stock funds. You may choose to build a diversified portfolio of various funds or select a simple yet diversified age-based retirement fund that are geared toward your projected retirement date. These funds may be a good alternative for investors who are not comfortable actively managing their account. You also have the option to rely on specific investment advice through our manged accounts program - Guided Pathways®.

    In addition, you have the option of signing up for the VantageBroker program, which provides you with access to even more investment options, including more than 13,000 mutual funds and individual securities. These services are provided by TD Ameritrade, a registered broker-dealer and member of FINRA/SIPC. (Note: You may participate in this program if you have at least $10,000 in your 457(b) Plan.) To sign up, log into your account then click Investments, then Brokerage, then Open a Brokerage Account. TD Ameritrade will provide you with a Personal Identification Number (PIN).

     

    Before making any investment decisions, please read the prospectus and/or fund fact sheets carefully.

    • To review investment options for your plan go to Funds.
    • To learn more about investing for retirement, visit www.icmarc.org/invest.

    Survivor Benefits

    You designate a beneficiary, or beneficiaries, to receive any remaining assets upon your death. Designating beneficiaries can help ensure your assets are paid according to your wishes. It also avoids the potential costs and delays of probate, and allows non-spouse beneficiaries to receive additional tax benefits.