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CalPERS webinar explains how 457 deferred‑compensation plan can supplement pensions and health costs
Summary
A CalPERS presenter outlined features of the CalPERS 457 deferred‑compensation plan, explained how pension reform and rising health‑care costs affect retirement income, and described enrollment steps and low fees available to participating public‑agency employees.
The California Public Employees' Retirement System (CalPERS) presented a recorded webinar explaining the CalPERS 457 deferred‑compensation plan and steps members can take to supplement pension and health‑care costs in retirement.
The presentation reviewed traditional retirement income sources, summarized changes under the California Public Employees' Pension Reform Act of 2013 (PEPRA), and described the tax and enrollment features of the CalPERS 457 plan, including pre‑tax and Roth after‑tax options.
Presenter, a CalPERS representative, told viewers that "Saving for retirement is no easy task," and emphasized that the 457 plan offers automatic payroll deduction, flexible contribution changes, and the option to use either pre‑tax or Roth after‑tax contributions. The presenter said contributions and earnings on pre‑tax deferrals grow tax deferred, while Roth deferrals may be withdrawn tax free if distribution rules are met.
The webinar placed the 457 plan in the context of pension reform and health‑care costs. It described PEPRA (2013) as the statutory change that generally classifies employees hired before Jan. 1, 2013, as Classic members and those hired on or after that date as PEPRA members, which can result in different retirement formulas and limits on compensation used to calculate pensions. To illustrate the impact, the presenter used a hypothetical example of a member with $3,500 in final compensation retiring at age 55 to show that the PEPRA retirement formula can produce a lower allowance at that age than the Classic formula; the presentation advised that supplemental savings such as a 457 plan can help close that gap.
Health‑care costs in retirement were also highlighted as a separate risk to retirement income. The presenter cited an Employee Benefit Research Institute estimate that a 65‑year‑old couple could need as much as $383,000 to have a roughly 90% chance of covering retirement health costs, and noted that Medicare does not cover all expenses.
On plan features, the presenter said CalPERS offers a common fund lineup across participating agencies and that CalPERS selects and monitors investment options. The webinar stated that plan fees are low and that the CalPERS 457 plan reduced fees twice over the prior four years, amounting to a 50% fee decrease since 2020. Enrollment is immediate for employees whose employers have adopted the plan; the presenter directed members to enroll at calpers457.com and to use their Social Security number and other identifying information to complete online enrollment. Account access and plan information were cited at calpers.voia.com and my.calpers.ca.gov.
The presentation closed by noting that State of California and California State University employees may also participate in similar deferred‑compensation options through the Savings Plus program administered by CalHR, which offers 457 and 401(k) options and a limited set of core and target‑date funds. The webinar and supporting documents are available on CalPERS' YouTube channel and website for members who want to review the material or take related education classes.
For specific benefit calculations, eligibility questions or legal authority, the presenter directed members to CalPERS' website and reminded viewers that CalPERS is governed by the Public Employees' Retirement Law and that the law controls in the event of any conflict with the presentation.
