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NPERS encourages voluntary Deferred Compensation Plan (DCP) contributions and explains benefits and enrollment
Summary
NPERS presenters promoted the DCP 457 plan as a voluntary way to save more for retirement, explained contribution limits (presenter cited $23,000 for those under 50 and $30,500 for catch-up), a $25/month minimum, and options to roll eligible sick/vacation banks into DCP before retirement.
At the NPERS pre-retirement seminar Heather Critchfield Smith urged eligible employees to consider the Deferred Compensation Plan (DCP), a voluntary 457 plan that allows additional pre-tax saving on top of mandatory retirement contributions.
Heather described DCP as fully voluntary and pre-tax, available through Workday for state employees and in some participating counties. She said DCP can be a useful tool to protect net retirement income because contributions are tax deferred and—unlike some mandatory accounts—DCP withdrawals do not carry the federal early‑withdrawal penalty since they are voluntary employee funds.
On contribution limits, Heather cited current annual limits of $23,000 for employees under 50 and $30,500 for those eligible for catch-up provisions (over 50). She noted the account can be started with as little as $25 per month and that eligible sick and vacation banks may be rolled into DCP prior to retirement to avoid a large taxable payout in a single year.
Heather also explained that DCP offers the same 17 investment options available in the mandatory DC account (index funds, target-date funds and bond options) and that funds cannot be accessed until a member ceases employment, though contribution changes and enrollment can be made anytime through Workday.
"The minimum to get started is $25 a month," Heather said, adding that DCP’s flexibility and lack of early-withdrawal penalty make it a useful first target for members who face an immediate cash need prior to tapping mandatory accounts.
NPERS advised members to consult their HR office about county participation, read DCP enrollment forms carefully, and consider combining NPERS benefit-estimates with outside financial advice when planning contributions and distributions.
