Thank you for your interest in the
State of Delaware 457(b) Deferred Compensation Plan!!!
The State of Delaware 457(b) Deferred Compensation Plan is a powerful tool to help you reach your retirement savings goals. The 457(b) Plan provides you with an easy and convenient way to save extra money for retirement, tax-deferred! Contributions to your savings account are automatically made by payroll deduction each pay period, pre-tax! Take a moment to read through the Plan Information and FAQ's below to learn more about the Plan. Are you ready to enroll?
Click the ENROLL NOW button above to get started.
What is a 457(b) Plan?
The purpose of the Deferred Compensation Plan is to provide a vehicle through which all
employees of the State of Delaware may, on a voluntary basis, provide for additional
retirement income security by deferring a portion of their current earnings.
How much can I contribute?
• Regular Contributions - If you are 49 years old or younger, you can contribute $17,000 annually. The minimum amount you can contribute per pay is just $10.
• Age 50 Catch up - If you are 50 years old or older, you can contribute an additional $5,500 annually, for a total annual contribution maximum of $22,500.
• Special Catch up - As an alternative to the age 50 catch-up, an employee may be eligible to contribute an additional $17,000 annually for the years preceding normal retirement age, for a total of up to $34,000 annually.
Where do I get started?
Enroll Online - Click the button at the top of this page that reads ENROLL NOW and follow the instructions to enroll directly with Fidelity Investments.
Enroll by phone - Call Fidelity Investments at 1-800-343-0860.
Enroll by paper form - Download and complete the NEW ENROLLMENT AGREEMENT FORM then fax the form to the State Treasurer's Office at 302-677-7031. Make sure to also view the PROSPECTUS for an understanding of how your money is invested.
Complete List of All 457(b) FAQs:
- What is a 457(b) Plan?
- When can I enroll in the Plan?
- How do I enroll in the Plan?
- When is my enrollment effective?
- How do I designate my Beneficiary?
- How much can I contribute?
- What are the IRS contribution limits?
- Does my employer contribute to my account?
- What "catch-up" contribution can I make?
- Can I defer my accumulated sick and/or vacation time?
- Can I use money in the Plan to purchase service time?
- I am a teacher. Can I participate in both the 457(b) and the 403(b) TSA Plan?
- What are my investment options?
- How much should I save for retirement?
- Can I meet with a professional retirement consultant to discuss my retirement plan?
- When am I vested?
- Can I make withdrawals from my account?
- Can I take a loan from my account?
- What do I do with my account once I retire or leave state service?
- Can I move money from another retirement plan into my account in the State of Delaware Deferred Compensation Plan and Match Plan?
- How do I access my account?
- How do I obtain additional investment option and account information?
1. What is a 457(b) Plan?
The purpose of the Deferred Compensation Plan is to provide a vehicle through which all employees of the State of Delaware may, on a voluntary basis, provide for additional retirement income security by deferring a portion of their current earnings.
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2. When can I enroll in the Plan?
There is no waiting period. You can enroll in the Plan at any time.
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3. How do I enroll in the Plan?
Log on to Fidelity NetBenefits at www.fidelity.com/atwork or call the Fidelity Retirement Benefits Line at 1-800-343-0860 to enroll in the Plan. You can also click the button at the top of this page that reads, "Enroll Now".
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4. When is my enrollment effective?
Your enrollment becomes effective the first available pay period following the month you have enrolled.
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5. How do I designate my Beneficiary?
Simply complete the
beneficiary form here, also located in the
Documents/Forms section of the website and return it to Fidelity Investments at the address provided at the top of the form.
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6. How much can I contribute?
Through automatic payroll deduction, you may contribute up to 100% of your eligible pay on a pretax basis, up to the annual IRS dollar limits. The Internal Revenue Code provides that the combined annual limit for total plan contributions is 100% of your W2 compensation or $49,000, whichever is less.
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7. What are the IRS contribution limits?
The IRS contribution limit is $17,000 for 2012.
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8. Does my employer contribute to my account?
The 144th General Assembly voted to suspend the Match Plan for FY 12. This language was included in the budget bill. The suspension is effective until June 30, 2012, unless lifted or extended.
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9. What "catch-up" contribution can I make?
Recapture option for governmental 457(b) plans. You can make catch-up contributions to the Plan in one or more of the three taxable years prior to attaining 'normal retirement age' as defined by the IRS that begins at the earlier of age 65 or the age at which the employee has the right to retire and receive a full State pension and ending at age 70½. If this applies to you in 2012, the total limit on deferral contributions, including the catch-up contribution, is up to $34,000 in 2012. Please note that the age 50 catch-up cannot be made in conjunction with the double limits discussed above. Participants who are age 50 or older are eligible to contribute an additional $5,500 in 2012. Participants may not be eligible to make a catch-up contribution if they have deferred the maximum amount allowed under their plan due to IRS and plan limitations or restrictions. This can be a big opportunity for some State of Delaware employees. In 2012, the maximum catch-up contribution is $34,000. To see if you qualify to make catch-up contributions, contact the Treasurer's Office.
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10. Can I defer my accumulated sick and/or vacation time?
You can defer your accumulated sick and/or vacation time to the Plan. Deferrals of unused sick and/or vacation time apply toward the 457 annual maximum deferral limits in the year that they are contributed to the plan. In order to defer sick and/or vacation time, you must complete a Sick/Vacation Deferral Form and and return it to the Treasurer's Office before the first of the month which the sick and/or vacation time would be paid. The Sick/Vacation Deferral Form can be found here or in the Documents/Forms tab of our website.
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11. Can I use money in the Plan to purchase service time?
You can use money in the Plan to purchase service time, including a sick leave buy-in. The advantage to this is that you would never pay taxes on the amount of the buy-in. The Pension Office will notify you of your eligibility, costs, and provide you with the forms at retirement.
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12. I am a teacher. Can I participate in both the 457(b) and the 403(b) TSA Plan?
Employees who meet the eligibility requirements for both Plans can participate in both Plans simultaneously. You can make the maximum allowable contribution amounts to each Plan annually. Potentially, an employee in the education field could contribute up to $34,000 in the 457(b) plan and $22,5000 in the 403(b) plan in 2012.
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13. What are my investment options?
To help you meet your investment goals, the Plan offers you a range of options. You can select a mix of investment options that best suits your goals, time horizon, and risk tolerance. The investment options available through the Plan include conservative, moderately conservative, and aggressive funds. A complete description of the Plan's investment options and their performance, as well as planning tools to help you choose an appropriate mix, are available online at Fidelity NetBenefits®. The Plan also offers the Fidelity Freedom Funds® that offer a blend of stocks, bonds and short-term investments within a single fund. Each Freedom Fund's asset allocation is based on the number of years until the fund's target retirement date. The Freedom Funds are designed for investors who want a simple approach to investing for retirement. For those desiring the most investment flexibility and choice, the Plan offers a self directed brokerage option, which gives you access to individual stocks and bonds as well as many other mutual funds. A complete description of the Plan's investment options and their performance, as well as planning tools to help you choose an appropriate mix, are available online at Fidelity NetBenefits®.
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14. How much should I save for retirement?
Fidelity's planning tools are designed to help you manage your assets as you plan for retirement. Simply log on to Fidelity NetBenefits® at www.fidelity.com/atwork to access these tools. You can also click on the Knowledge Center and Calculators tabs of our website for information on saving for retirement.
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15. Can I meet with a professional retirement consultant to discuss my retirement plan?
Yes you can. The State of Delaware offers private one-to-one consultations with a retirement professional from Fidelity Investments on a continuous basis throughout the year. Consultations are offered at convenient locations up and down the state. Check the Knowledge Center tab of our website for a location near you or simply click here.
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16. When am I vested?
You are immediately 100% vested in your own contributions to the Deferred Compensation Plan.
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17. Can I make withdrawals from my account?
Withdrawals from the Plan are generally permitted when you terminate your employment, retire, become permanently disabled, or have severe financial hardship as defined by your Plan. Keep in mind that withdrawals are subject to income taxes. Any assets distributed from your governmental 457(b) plan will be taxed as ordinary income in the year withdrawn; if you are under age 59½ at the time of the distribution, a 10% early withdrawal penalty may apply to any amounts which were rolled into the plan from an IRA or a plan other than another governmental 457(b) plan. If the distribution is eligible to be rolled over, but is not directly rolled over to an eligible plan or IRA, 20% mandatory withholding of federal income tax applies. Federal income tax will not be withheld from governmental 457(b) plan assets if an eligible plan-to-plan transfer is made to another employer's 457(b) plan that accepts the transfer. Be sure you understand the federal and state tax consequences of any distribution before you initiate one. You may want to consult your tax adviser about your situation. Please note that your distribution options differ between the Deferred Compensation Plan and the Match Plan since they are different plan types.
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18. Can I take a loan from my account?
The 457(b) plan does not permit loans from your account.
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19. What do I do with my account once I retire or leave state service?
Your Deferred Compensation Plan allows you to leave your money in the plan and defer your distribution to a later date, receive periodic payments from your account, purchase an annuity, transfer your account to another retirement plan (provided that plan accepts transfers), or receive a lump sum distribution. Your Match Plan allows you to leave the money in your plan (subject to certain minimums), take a partial or full distribution, or roll it over to another eligible retirement plan or into an individual retirement account (IRA).
If you choose to leave your money in the Deferred Compensation Plan and/or Match Plan, a $4 record keeping fee will be deducted from your balance in each account on a quarterly basis. You will see this fee on your quarterly statement from Fidelity Investments.
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20. Can I move money from another retirement plan into my account in the State of Delaware Deferred Compensation Plan and Match Plan?
You are permitted to roll over eligible pretax contributions from another 401(k) plan, 401(a) plan, 403(b) plan or a governmental 457(b) retirement plan account or eligible pretax contributions from conduit individual retirement accounts (IRAs). A conduit IRA is one that contains only money rolled over from an employer-sponsored retirement plan that has not been mixed with regular IRA contributions. Contact the State Treasurer's Office for details. You should consult your tax adviser and carefully consider the impact of making a rollover contribution to your employer's plan because it could affect your eligibility for future special tax treatments.
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21. How do I access my account?
You can access your account online through Fidelity NetBenefits® at www.fidelity.com/atwork or call the Fidelity Retirement Benefits Line at 1-800-343-0860 to speak with a representative.
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22. How do I obtain additional investment option and account information?
Your Employer has appointed Fidelity to provide additional information on the investment options available through the Plan. Also, a statement of your account may be requested by phone at
1-800-343-0860 or reviewed online at Fidelity NetBenefits®.
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