Nebraska Retirement Systems opens Deferred Compensation Plan enrollment, outlines 2025 limits

Nebraska Retirement Systems announced that participation in the Deferred Compensation Plan (DCP) will be available to state employees during open enrollment and described how to enroll, contribution mechanics and distribution options. The agency said employees may elect to participate during open enrollment, designate a payroll deduction amount, and that contributions will begin with the first paycheck in July after open enrollment ends.

The retirement office described DCP as a voluntary, long-term retirement savings account intended to supplement mandatory retirement plans. Contributions are made on a pre-tax basis and are deducted automatically from paychecks. The announcement stated the minimum contribution is $25 per month, or $12.50 if paid biweekly, and that annual maximums follow federal tax-code limits updated each year.

For 2025 the office cited a standard maximum contribution limit of $23,500 and a higher limit of $31,000 for older participants. The announcement also referenced a new "super catch-up" provision added by SECURE Act 2.0 and provided a figure for that amount as stated in the recording; employees should confirm the exact dollar limit with the retirement office or plan administrator before making changes to their contribution levels.

The agency cautioned there is no guaranteed rate of return in DCP and that account balances will fluctuate based on the investment choices and market performance. It said there are 17 investment options that were updated in coordination with the Nebraska Investment Council in January 2021 and directed employees to the retirement website and the annual investment report for details. The office noted it cannot provide individualized investment advice but offers generic educational materials.

On distributions, the retirement office said participants can take distributions after terminating employment and that distributions are taxed as ordinary income under state and federal law. The announcement said federal rules allow hardship distributions determined case-by-case by the Public Employees Retirement Board and stated there are no early-withdrawal penalties under the plan; available distribution methods include lump-sum withdrawals, systematic withdrawals and rollovers to other tax‑sheltered retirement plans. Participants are not required to take distributions until they reach the required minimum distribution age.

Employees were reminded to designate beneficiaries specifically for DCP; beneficiary designations on mandatory retirement accounts or life insurance do not transfer to DCP accounts. The announcement explained employees should use the plan administrator's online access (Ameritus) to make investment elections; if an employee already has an Ameritus login tied to the mandatory plan, the DCP account will become available once Ameritus receives enrollment information. New users will receive mailed account-access information.

The retirement office advised employees who plan to defer unused leave at termination to consult their HR or payroll office because those deferrals require a paper Deferred Compensation Plan form rather than online enrollment. It also cautioned employees who have contributed to another 457 plan during the year to verify total contributions so they do not exceed federal limits.

Finally, the announcement said DCP is generally available only to U.S. citizens but that some non‑citizen situations may qualify; employees with questions were directed to the Deferred Compensation page on the retirement office website or to call the office for assistance. The recording concluded with a request to visit the agency website for more information or to contact the retirement office directly.