North Carolina 457(b) Deferred Compensation Plan
The North Carolina 457(b) Deferred Compensation plan is sponsored by the State of North Carolina and governed by the Department of the State Treasurer. The plan administrator for this program is Prudential. The 457(b) is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on a pre or after-tax basis.
Pre or after-tax contributions may be invested in fixed and variable accounts under this plan. 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 and temporary employees who are subject to FICA withholdings are eligible to participate (students are not eligible).
Due to plan rules with Prudential, you cannot enroll or change contributions to the Prudential NC 401k through ConnectCarolina. You must use the Prudential Portal at https://ncplans.retirepru.com/enrollment.html or you can print out forms from the Pudential site and return them to the UNC OHR Benefits Office by scan/email at email@example.com or by fax at 919-962-6010.
The annual contribution limit to the 457 (b) plan is $19,500 for 2020. You may be eligible for a catch-up contribution of an additional $6,500 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 $26,000.
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.
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.
Prudential 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.