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Nebraska Retirement Systems outlines voluntary Deferred Compensation Plan for judges: contribution limits, funds and distribution choices
Summary
The video explains the voluntary Deferred Compensation Plan (DCP) for judges, including contribution mechanics, 2026 contribution limits and catch‑up provisions, investment fund options set by the Nebraska Investment Council, distribution choices, required minimum distribution rules and deferred leave payout options.
In a recorded training, Nicholas Bennetts of Nebraska Retirement Systems described the voluntary Deferred Compensation Plan (DCP) available to active judges and explained how it works alongside the mandatory judges’ retirement plan.
Bennetts said the DCP accepts payroll‑deducted, tax‑deferred contributions with a $25 monthly minimum and higher annual limits for 2026. The transcript included inconsistent numeric references but Bennetts described a base annual limit around $24,500 for 2026 and two catch‑up provisions that could raise allowable contributions: an age‑based catch‑up (an additional $8,000 for members aged 50–59 or 64+) and a super catch‑up (an additional $11,250 for certain ages in 2026) subject to eligibility rules. He also said that members with at least $150,000 in FICA wages in 2025 could be ineligible for the catch‑ups because additional contributions would have to be Roth contributions, which the plan’s current systems cannot process.
On investments, Bennetts said DCP assets are invested according to participant choices from 17 funds established by the Nebraska Investment Council (NIC), including LifePath target‑date index funds that automatically adjust allocations as participants near retirement. He noted Ameritas is used for DCP account access and transactions and that NPERS provides online guidance and an annual investment report to review fund performance.
Bennetts described distribution options: members must generally terminate employment to take DCP distributions unless they experience a severe and unforeseen emergency; they may defer distributions (subject to required minimum distribution rules), take a lump sum or series of lump sums, set up a systematic withdrawal (minimum $100 each payment), or roll over funds to another qualified retirement plan. He warned about the IRS required minimum distribution rules and potential penalties for failing to withdraw appropriate amounts when required.
A feature Bennetts highlighted is deferred leave payouts: eligible accrued leave can be converted into DCP contributions before retiring by submitting a form to NPERS in advance; the conversion is subject to employer payout rules and counts toward DCP limits. Enrollment is done through Workday and members are encouraged to consult the plan booklet and NPERS videos for guidance.
