Saving for the future is crucial yet challenging. To simplify the process, alongside our primary retirement plans, we offer voluntary deferred compensation plans to help you prepare for life ahead.
Deferred Compensation Plans - 403(b) and 457(b)
About the benefit
Employees can join tax-sheltered investment programs through payroll deduction under Sections 403(b) and 457 of the Internal Revenue Code. They can participate in both a 403(b) program and the Missouri Deferred Compensation Plan (457 Plan).
These plans allow tax-deferred or after-tax (Roth) retirement savings, offering potential tax advantages by reducing reportable income at retirement compared to working years.
Contributing on a Roth basis means employees generally won't pay taxes on benefits received, as taxes were already paid. This tax break applies to money withdrawn during retirement from the Roth IRA.
Why contribute to a deferred compensation plan?
Participating in the plan offers several benefits:
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Tax advantages: Contributions are made before income taxes are withheld, reducing current taxable income.
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Tax-deferred growth: Interest and earnings grow without immediate taxation, allowing for potentially faster accumulation compared to taxable accounts.
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Enhanced retirement planning: Supplementing other retirement income sources, like state pensions and Social Security, which may not fully replace final salary upon retirement
403(b) versus 457(b) plans
Contribution limits may vary between 403(b) and 457(b) plans. Review the benefit contribution limitations for the 403(b) and 457(b) plans.
Investment options also vary. 403(b) investment options differ according to the provider selected. 457(b) investments are directed into specific types of funds.
403(b) plans offer loans under certain circumstances. They do not offer a pre-retirement “catch-up” option. 457(b) plans do not offer loans, but a pre-retirement “catch up” provision may be available.
Enroll
Please visit the 403(b) page and 457(b) page for enrollment information.