What are the tax advantages to me of contributing to the plan?_
You pay no current federal income tax on your contributions or any earnings on those contributions. You will pay tax when you eventually withdraw money from the plan, but it is possible that you may be in a lower tax bracket when you receive those benefits.
Neither Voya nor its affiliated companies or representatives provide tax or legal advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.
Can I rollover into the Plan?+
Yes. The Plan permits you to rollover benefits from another employer-sponsored eligible retirement plan or traditional IRA. Note that amounts rolled into a governmental 457 plan from another plan type would be subject to the 10% premature distribution penalty tax if distributed prior to age 59 ½ (unless an IRS exception applies).
When am I subject to taxation? +
All of the payments you receive from the Plan are subject to federal and state income taxes when paid.
Federal income tax withholding will apply to your payments, as described below, based on whether you were eligible to rollover the distribution.
Amounts distributed from the Plan are not subject to the 10% premature distribution penalty tax if distributed prior to your attaining age 59½. However, if you have previously rolled over amounts from a plan other than a governmental 457 plan, such rollover amounts will be subject to this 10% premature distribution penalty tax if distributed prior to attaining age 59½, unless an IRS exception applies.
IRS exceptions to the 10% premature distribution penalty tax include payments made:
- If you receive a distribution that was eligible to be rolled over, a mandatory 20% will be withheld for federal tax purposes at the time of payment.
- If you receive a distribution that was not eligible to be rolled over, 10% will be withheld for federal tax purposes at the time of payment. However, you may elect to have no withholding withheld.
- to your beneficiary as a result of your death;
- upon your separation from service/retirement on or after you attain age 55;
- in substantially equal amounts over your life/life expectancy; or
- as a result of your total and permanent disability.
How do I change investments?+
There are two types of changes that you can make with respect to the manner in which your account is invested: 1) a change in the way future contributions are invested, and 2) a change in the way your current account balance is invested. An allocation change is the way you direct the investment allocation of your future contributions. An inter-fund exchange (transfer) is the way you change the manner in which the current assets in your account are invested.
There are several ways that you will be able to make an allocation change or transfer assets among fund options. You can:
- Call the Retirement Readiness Service Center at (800) 584-6001. Representatives are available Monday - Friday 5:00 a.m. – 6:00 p.m. (Pacific Time).
- Utilize the voice response unit (VRU) by dialing the above toll-free number available 24 hours a day.
- Access your account through this custom website by selecting the Login link in the top navigation bar.
When are statements received?+
Statements are mailed quarterly, showing a summary of all transactions within your account for the quarter. This would include contributions and fund transfers.
What happens if I don’t designate a Plan beneficiary, or keep information current?+
If you do not name a beneficiary (or if your beneficiary dies before you), death benefits will be paid to your legal spouse or your estate if you do not have a legal spouse.
I have recently divorced. How will amounts awarded to my former spouse be taxed?+
A Qualified Domestic Relations Order (QDRO) is a court order used to divide specific types of retirement plans. A QDRO grants the "alternate payee," your former spouse, the right to a part of the retirement benefits you earned through an employer-sponsored retirement plan. Amounts awarded and paid to a former spouse as a result of a divorce will be taxable to the former spouse.