Retirement office outlines Nebraska Deferred Compensation Plan, 2025 contribution limits

A presenter from the Nebraska retirement office explained the Deferred Compensation Plan (DCP), telling listeners that it is “a voluntary retirement savings program” that allows employees to defer and invest a portion of their compensation to supplement mandatory retirement plans. The announcement covered how to enroll, contribution minimums and limits for 2025, investment choices, distribution options and how beneficiaries are designated.

Why it matters: The DCP gives state employees another tax-advantaged way to save for retirement. Decisions about contribution amounts, investment selections and beneficiary designations affect take-home pay, tax treatment and long-term retirement outcomes.

The presenter said employees who enroll during open enrollment will have contributions begin with their first paycheck in July, and that contribution changes can be made year-round either by logging into the employee work center or by submitting a DCP enrollment change form to the retirement office. “Contributions to DCP are made on a pre-tax basis,” the presenter said, and deductions are taken automatically from paychecks.

On minimums and federal limits for 2025, the recording states the minimum contribution is $25 per month (or $12.50 if paid biweekly). It lists the 2025 standard federal contribution limit as $23,500 and an increased limit of $31,000 for eligible older participants, described in the recording as $7,500 more than the under‑50 limit. The presenter also described a SECURE Act 2.0 “super catch‑up” provision for 2025, noting a stated amount for that provision and that it applies to individuals attaining ages 60 to 63 in 2025 but not to those attaining 64 in 2025.

On investments, the presenter said participants are responsible for investment choices and warned there is no guaranteed rate of return. The recording lists 17 investment options that were updated in conjunction with the Nebraska Investment Council in January 2021 and directs listeners to the retirement office website and annual investment report for fund descriptions and performance information. “The retirement office cannot provide individual investment advice but we can provide generic investment information,” the presenter said, and educational materials are available at npers.ne.gov.

The presenter described distribution choices, saying distributions can be taken after employment termination and listing options the recording called lump sum, automatic/systematic withdrawals, or rolling funds to another tax‑sheltered retirement plan. The recording states distributions “will be subject to state and federal income tax.” The announcement also states there are hardship distributions determined on a case‑by‑case basis by the Public Employes Retirement Board. A phrasing in the recording about early withdrawal penalties is unclear; the presenter’s statement should be confirmed with the retirement office for participants who may face tax or penalty questions.

On administration, the presenter said DCP beneficiary designations do not carry over from mandatory retirement accounts, and that to designate beneficiaries for DCP participants must complete and submit an employer beneficiary designation form. The presenter recommended using Ameritus online access for investment elections and said that if an Ameritus account already exists for the mandatory retirement plan, DCP access will be available using that login once Ameritus receives enrollment information. The recording also instructed employees not to use the employee work center for certain DCP transactions and said deferrals of unused leave at termination require a paper form and consultation with HR/payroll.

The recording notes a precaution about contributing to more than one 457 plan in a calendar year and urges participants who have contributed to another 457 plan to make sure they do not exceed annual limits. Finally, the presenter said DCP is available to U.S. citizens, with limited possible exceptions for some non‑citizens, and encouraged listeners with further questions to visit the Deferred Compensation page on the retirement office website or to call the office.

The retirement office recording provides contact information and points listeners to further written materials; participants with tax, penalty or eligibility questions were advised to contact the retirement office directly for individualized clarification.