457 Smart Plan: A Guide to Voluntary Savings Programs

A 457 Smart Plan is a type of voluntary savings program designed for government employees and tax-exempt organizations. It's a flexible way to save for retirement.

Contributions to a 457 plan are made with pre-tax dollars, reducing your taxable income for the year. This can lead to significant tax savings over time.

One of the key benefits of a 457 plan is that it allows you to make catch-up contributions, which can be especially helpful if you're starting to save later in life.

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The SMART Plan allows for voluntary pretax contributions through payroll deduction. Employees may enroll at any time.

You can contribute to the SMART Plan by visiting the SMART Plan website or calling 877-457-1900 for more information.

The SMART Plan has a third-party administrator and record-keeper, Empower, which serves the Commonwealth of Massachusetts.

To start or change a biweekly contribution amount, visit www.mass-smart.com or call 877-457-1900. You may also contact your local SMART Plan representative, Michael Geraghty, at [email protected], or direct line, 781-577-8130.

The SMART Plan allows participants to contribute up to the maximums for both the 403(b) Plan and the SMART Plan.

Here's a comparison of the 457(b) and 403(b) plans:

For more information, go to https://www.umassp.edu/employee-center/elective-deferral-retirement-plans.

Contributions to the 457 SMART Plan can be made through payroll deductions, allowing employees to save and invest before-tax dollars.

The maximum elective deferral limit for the 457(b) plan is $30,000 for employees 50 or older, and $22,500 for employees under 50, as of 2023.

Contributions are taken via payroll-deduction and are data-fed into the University's payroll system (HR Direct) by Empower monthly for the Commonwealth SMART plan, and bi-weekly for the University 403(b) plan.

Funds in the 457 SMART Plan are invested in a guaranteed fixed annuity, offering a 100% principal contribution plus interest, as required by Social Security regulations.

Participants may also contribute to a voluntary OBRA retirement account, and should work directly with Empower Retirement for investment and withdrawal/rollover options.

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If you work at least 20 hours a week on a year-round basis, you're required to contribute to the Middlesex County Retirement System, a defined benefit plan.

This plan is mandatory for benefits-eligible employees, and you'll need to contribute a portion of your income to it.

In some cases, if you work part-time or on a seasonal basis, you might be eligible for the MA SMART Plan OBRA Deferred Compensation Plan instead, which requires a 7.5% deduction of your income.

The Social Security regulations require that participants in an OBRA program receive 100% of their principal contributions, plus interest, which is invested in a guaranteed fixed annuity.

You can request a refund or roll the funds into another eligible employer-sponsored plan or a traditional Independent Retirement Account (IRA) when you separate from the Town.

The Town's OBRA plan is the MA SMART Plan, managed by Empower Retirement, and you can find more information about it in the SMART Plan OBRA Information Guide.

If you're a benefits-eligible employee, you can also choose to contribute to a voluntary 457(b) Deferred Compensation Plan, which allows you to save and invest additional money for retirement with tax benefits.

These plans offer tax-deferred retirement savings, and you can withdraw the funds without being taxed until you retire.

Some 457(b) plans, like the one offered by the Town of Bedford, also offer a Roth contribution option, where you make after-tax contributions and withdraw them tax-free at retirement if certain criteria are met.

To enroll in the MA SMART Plan, you can contact HR for an enrollment code and follow the instructions to set up your account.

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You can save and invest for retirement with tax benefits through voluntary deferred compensation plans. The University of Massachusetts offers two such plans: the University 403(b) plan and the Commonwealth SMART plan.

The University 403(b) plan allows you to contribute up to $22,500 if you're under 50, or $30,000 if you're 50 or older, in 2023. Contributions are taken via payroll-deduction and are data-fed into the University's payroll system bi-weekly.

The Commonwealth SMART plan, on the other hand, has a limit of $22,500 if you're under 50, or $30,000 if you're 50 or older, in 2023. Contributions are taken via payroll-deduction and are data-fed into the University's payroll system monthly.

You can enroll in the SMART plan at any time, and changes to your contribution amount will take effect the following calendar month.

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There are different types of 457 plans available to employees. The Commonwealth of Massachusetts 457(b) Deferred Compensation Plan, also known as the SMART Plan, is a popular option.

You can contribute to a 457(b) plan through payroll deductions, which can be data-fed into your university's payroll system bi-weekly. The plan administrator, Empower Retirement, offers a wide array of low-fee investment options.

The University of Massachusetts 403(b) Elective Deferral Savings Plan and the Commonwealth of Massachusetts 457(b) Deferred Compensation Plan (SMART Plan) are two valuable retirement investment options available to UMass employees. These options make it easy to save and invest more for retirement with special tax advantages.

As an employee of the University of Massachusetts, you can contribute up to $22,500 to the 403(b) plan and/or 457(b) SMART Plan if you're under age 50, or up to $30,000 if you're 50 or older. The sooner you begin saving and investing, the sooner any earnings on your money will grow tax-deferred.

You can also contribute to a pre-tax or post-tax Roth option in the University 403(b) plan or the Commonwealth SMART plan. Both plans offer employee-only contributions and can be taken via payroll-deduction.

The Town of Bedford offers optional deferred compensation plans for benefits-eligible employees, allowing them to save and invest additional money for retirement with tax benefits. A 457(b) plan is a tax-deferred retirement savings plan, where funds are withdrawn from an employee's income without being taxed until withdrawal, typically at retirement.

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