Understanding the ICMA 457 Plan for Your Future

The ICMA 457 plan is a retirement savings plan designed for local government employees, offering a unique set of benefits.

It's sponsored by the International City/County Management Association (ICMA) and managed by TIAA, a reputable financial services company.

Eligible participants can contribute pre-tax dollars to their accounts, reducing their taxable income and lowering their tax liability.

The plan allows for flexible contribution amounts, allowing participants to adjust their contributions as their financial situation changes.

Additional reading: Icma Rc 457 Plan

A deferred compensation plan is another name for a 457(b) retirement plan, or “457 plan” for short.

These plans are designed for state and municipal workers, as well as employees of some tax-exempt organizations.

You can contribute a portion of your salary to a retirement account if you participate in a deferred compensation plan.

That money and any earnings you accumulate are not taxed until you withdraw them.

A 457 deferred compensation plan is a retirement plan that allows public employees to set aside money for retirement from every paycheck.

For another approach, see: State of Ct Deferred Compensation 457 Plan

You can defer compensation into the plan on a before-tax basis or after-tax (ROTH) basis.

If you participate in a governmental 457(b) retirement plan, you can contribute a portion of your salary to a retirement account.

The money you contribute and any earnings you accumulate are not taxed until you withdraw them.

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The ICMA 457 plan offers several benefits to its participants, including a high level of employer matching contributions, which can significantly boost your retirement savings.

Employer matching contributions can range from 50% to 100% of your contributions, with some employers matching 5% to 10% of your salary.

One of the key advantages of the ICMA 457 plan is its flexibility, allowing you to invest in a variety of assets, including stocks, bonds, and mutual funds.

Investment options include a range of fund types, such as core stocks, international stocks, and bond funds, which can help you diversify your portfolio.

The plan also offers a loan provision, allowing you to borrow up to 50% of your account balance, which can be a useful feature in times of financial need.

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For most Americans, pension and Social Security benefits will not provide enough retirement income. Investing in a deferred compensation plan is a good way to supplement your retirement income.

A 457 deferred compensation plan can help you create a more financially secure future for you and your family.

Explore further: 457 Deferred Compensation Plan Withdrawals

A key difference between 457(b) and 401(k) plans is that 457 plans are designed for public sector employees, while 401(k) plans are for private sector employees.

One significant distinction between these plan types is how early withdrawals are taxed. There isn't an additional 10% early withdrawal tax for 457 plans, but withdrawals are subject to ordinary income taxes.

If you need to withdraw funds from a 457 plan, you have options. Distributions are available in a lump sum, annual installments, or as an annuity.

A major advantage of 457 plans is that there's no tax withholding if you leave your job and roll over your money into an IRA or your new employer's eligible retirement plan. However, if you don't roll over your distribution and don't take it in annual installments of more than 10 years, it will be subject to 20% mandatory federal tax withholding.

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Here's a quick comparison of 457 and 401(k) plans:

You can participate in the ICMA 457 plan on either a before-tax or after-tax basis, giving you flexibility in how you contribute to your retirement savings.

Mission Square, the plan administrator, offers financial guidance from their Retirement Certified Financial Planner professionals on staff. This means you can get expert advice to help you make the most of your plan.

The 2025 calendar year maximum contributions for the plan are not specified in the article, but it does mention that there are weekly webinars and an interactive Financial wellness center available through the Mission Square website to help you manage your finances.

The plan is designed for public employees, allowing you to set aside money for retirement from every paycheck.

Take a look at this: Finance Plan

A 457 plan is a type of retirement plan designed for public employees. It allows them to set aside money from every paycheck for retirement.

You can contribute to a 457 plan on a before-tax basis or after-tax (ROTH) basis. This means you can choose how you want to contribute to the plan, depending on your financial situation and goals.

A 457 plan is also known as a deferred compensation plan. It's a type of retirement plan that's specifically designed for state and municipal workers, as well as employees of some tax-exempt organizations.

Contributing to a 457 plan is a great way to save for retirement. You can contribute a portion of your salary to a retirement account, and the money and any earnings you accumulate are not taxed until you withdraw them.

Here are some key details about 457 plans:

Keep in mind that a 457 plan is not the same as a Payroll Deduct Roth IRA. The investment funds for these two plans are managed separately.

The fees associated with the 457 Deferred Compensation Plan are being restructured to benefit participants. ICMA-RC, the administrator, will charge a percentage-based fee for investment fund managers and a flat administrative fee.

A percentage-based fee for investment fund managers has been deducted from earnings prior to allocation to individual participant accounts. However, this fee will now be disclosed separately in fee disclosure documents on the ICMA-RC website.

The new fee structure includes a $73.00 annual administrative fee, which will be subtracted from accounts on a quarterly basis. This fee will appear on future quarterly statements.

Most investment funds will be index funds, which typically charge lower percentage-based fund manager fees than comparable actively managed funds.

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Information Sessions are being held across the City to provide a short presentation and answer questions on the change to the 457 Plan investment funds. These sessions are a great opportunity to get informed and ask questions in person.

The Finance Department's Pension Administration team will be visiting various locations from October 23 to November 8. You can attend a session at a location that's convenient for you.

Here is a list of the scheduled Information Sessions:

You can find the complete schedule of Information Sessions at the end of this page. Make sure to mark your calendar and attend a session that suits your schedule.

The ICMA 457 plan is an excellent benefit for local government employees, and understanding its plan eligibility and administration is key to making the most of it.

Eligibility for the plan is typically offered to local government employees who work at least 20 hours a week, and participation is usually mandatory for full-time employees.

The plan is administered by the International City/County Management Association (ICMA) and is designed to provide a range of investment options to help employees achieve their retirement goals.

Plan administration includes tasks such as setting up accounts, contributing to the plan, and managing investment options, which can be done online or through the plan's customer service team.

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A key aspect of plan administration is the ability to transfer existing retirement savings into the ICMA 457 plan, making it easier for employees to consolidate their retirement accounts in one place.

The plan's investment options are carefully selected to provide a range of choices that can help employees balance risk and potential returns, and the plan's fees are designed to be competitive with other 457 plans.