North Carolina 457(b) Deferred Compensation Plan

The 457(b) plan is sponsored by the State of North Carolina and governed by the Department of the State Treasurer. The plan administrator is Great West Retirement Services.

The 457(b) is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on a tax-deferred basis. This means that taxes are not paid on contributions or earnings until the time of distribution. Tax deferred contributions may be invested in fixed and variable accounts under this plan, including publicly-traded mutual funds. Account contributions and earnings are required by law to be held in a separate trust for the exclusive benefit of participants and their beneficiaries.
 

All permanent employees (part- or full-time) are eligible to participate in this program.

Contribution Amounts

The annual contribution limit to the 457 (b) plan is based on a percentage of your taxable pay. During 2008, you can contribute up to 100 percent of your taxable pay not to exceed $15,500. You may be eligible for a catch-up contribution of an additional $5,000 if you are 50 or older, or will turn 50 during the current calendar year. For employees age 50 or older the maximum contribution amount is $20,500.

As an alternative to the age 50 catch-up, a participant is eligible to defer up to twice the contribution limit in effect for the three years preceding the employee's normal retirement age, subject to eligibility. You should discuss this with your financial advisor or tax consultant to determine if you are eligible to take advantage of this rule.

Coordination with other Supplemental Plans

Contributions to the 457(b) deferred compensation plan are not aggregated with 403(b) or 401(k) plan limits. 

To enroll in the 457(b) plan, contact Great West Retirement Services at 888-600-2763. All enrollments and changes are handled directly by Great West.

Allocating Contributions

When you enroll in the 457(b) Plan you must also decide what portion of your contributions will go into a fixed account and/or what portion will go into an investment account. You may change your allocation for future premiums at any time by contacting Great West.

Vesting

You are immediately 100 percent vested in the value of your employee contributions.

Loans

You may be able to borrow against your account; contact Great West for more information about loan provisions.

Death Benefits

In the event of your death, your total account is available to your designated beneficiary. You designate your beneficiary when you complete your 457(b) enrollment application.

Distribution Options After Leaving the University

Generally, distributions from a 457(b) plan can be made when an employee severs employment, becomes disabled or dies. In most cases, payments received from a 457(b) account are taxed as ordinary income.

Retirement Benefits

Under the 457(b) plan, the amount of the benefit is based on the total accumulation in the account(s). There are no age or service requirements to meet in order for a participant to begin receiving a benefit.

Great West makes available optional forms of payments and a variety of retirement payment options designed to allow you to tailor-make your retirement program to meet your financial needs. These may be fixed payments or payments on a variable basis, or a combination of payment options. You may also elect to receive a lump sum distribution.

If you have questions about the 457(b) plan, contact Great West Retirement Services at 888-600-2763, or contact your Benefits Sepcialist.