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Frequently Asked QuestionsAbout the PlanIt is a supplemental retirement savings plan offered by the Public Employees` Retirement System (PERS) and authorized under Section 457 of the Internal Revenue Code. You decide if you want to join and the amount, within permissible limits, that you want to save. It is a tax-deferred savings plan that offers two tax advantages: 1. Your current income taxes are reduced immediately because you set aside or "defer" part of your salary or "compensation." You pay no Federal or State income taxes on your contributions until you withdraw your funds, usually at retirement when you may be in a lower tax bracket. 2. Your interest and/or earnings are also tax deferred until withdrawal. Frequently Asked QuestionsWho is eligible to participate in the Deferred Compensation Plan? May I increase or decrease the amount of my deferral at any time? May I change my investment options? May I transfer money already accumulated from one investment to another? May I discontinue my participation in the Plan at any time? How will my money be invested? Can MDCPT representatives give me investment advice? How do I know when it`s time to change my investments? When will I be able to withdraw my money? What is a De Minimis Distribution and how do I qualify? What is considered an unforeseeable emergency (hardship withdrawal)? What is the advantage of investing in the Deferred Compensation Plan instead of a regular savings account?With Deferred Compensation, the money saved is deducted from your paycheck before your income tax is calculated. This reduces your taxable income; therefore reducing your income tax liability immediately. As a Plan participant, you put tax dollars to work for you! Does the Deferred Compensation Plan affect my service retirement benefit from a retirement plan administered by PERS or my Social Security?No. Your contributions and benefits for retirement and Social Security are based on your gross income before your contributions to the Deferred Compensation Plan are deducted. Note: Independent contractors and other employees who do not have Social Security deducted from their income, may be affected differently. Who is eligible to participate in the Deferred Compensation Plan?Any employee, elected official, or independent contractor of the State of Mississippi or one of its participating political subdivisions (cities, counties, hospitals, etc.) is eligible to participate. How do I enroll in the plan?Simply complete a Participation Agreement and submit it to SBA at PO Box 105, Jackson, MS 39205. Please see the "Enrollment" section of this site for further information. How much salary may I defer?You decide how much you want to invest up to the maximum allowable. You may defer as little as $25.00 per month. The maximum amount you may defer is 100% of includible compensation, but not more than $16,500 per year, (or such larger amounts as may be prescribed by the Secretary of the Treasury). If you are within four years of retirement eligibility, you may qualify for the "catch-up" provision and be able to invest up to $33,000 for 2009. May I increase or decrease the amount of my deferral at any time?Yes. You must sign a new Participation Agreement prior to the first of the month in which the change is to be effective. May I change my investment options?Yes. You can request that future contributions be changed from one investment option to another via our toll-free automated phone system, the internet, or by calling the MDCPT office. May I transfer money already accumulated from one investment to another?Yes. The Plan has fund transfer capability. A Transfer Request Form may be used, or you may call the MDCPT office, use our toll-free automated phone line, or use the internet. The amount transferred may be subject to limitations. A registered representative can give you this information. Transactions will be processed the day received provided the transaction instructions are received in proper order prior to 3:00 PM CST on a business day the NYSE is open, or by the last close of the NYSE that day. If the request is received outside the normal business hours of the NYSE, it will be processed on the next business day the NYSE is open. May I discontinue my participation in the Plan at any time?Yes. You can complete a cancellation form or send a letter of cancellation to the Plan office. Notice must be received prior to the month in which the cancellation is to be effective. How will my money be invested?Several investment options are offered. Your money is invested in the investment option(s) you select. We encourage you to carefully review the material on the investments offered, talk with a Registered Representative of the Plan, and choose the option(s) which help meet your own needs and goals. Can MDCPT representatives give me investment advice?No, representatives are prohibited from providing tax or investment advice or making recommendations to you regarding your investment plan. Representatives may only provide information that will enable you to make an educated decision regarding your supplemental retirement savings. How do I know when it`s time to change my investments?Most people agree that the best approach to long term investing is to establish an investment plan and stay with it. However, your plan should be evaluated once per year to see if it is on track with your desired goals. Also, there are certain times that you should re-evaluate your investment plan. Births, death, marriage, retirement, divorce and other major events in your life should prompt you to reassess your investment goals and financial needs. When I retire or terminate employment, do I need to do anything with my deferred compensation account?Effective January 2002, you are no longer required to make an election with your MDCPT account upon your separation of service. However, once you have separated service, you must begin a distribution by April 1st of the calendar year, following the calendar year, in which you attain age 70½. When will I be able to withdraw my money?You are eligible to receive payment(s) from the Plan when you retire, leave state employment or have an unforeseeable emergency (hardship withdrawal) or take a De Minimis Distribution (small account distribution). Upon your death your beneficiary, or, if none is designated, your Estate will receive benefit payments. What is a De Minimis Distribution and how do I qualify?A De Minimis Distribution means that you are eligible to receive an in-service distribution if your account balance is $5,000.00 or less and there has been no deferral activity in the account for two or more years. This type of distribution can only be made to a participant one time. What is considered an unforeseeable emergency (hardship withdrawal)?For the purpose of this Plan, the term "unforeseeable emergency" means a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, or loss of the Participant`s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that constitute an unforeseeable emergency will depend on the facts of each case. Investment options offered through a retirement plan are long-term investments designed for retirement purposes. Money distributed will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. Prospectuses that contain additional information are available through your local SBA representative.
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