Deferred Compensation Plan
The Minnesota State Deferred Compensation Plan allows eligible employees to accumulate additional retirement savings on a tax-favored basis through automatic payroll deductions. Permanent full-time, seasonal and part-time employees are eligible to participate immediately upon hire. You can choose to contribute pre-tax or after-tax dollars. You can increase, decrease or stop your contribution amount the first of any month.
- Pre-tax savings option - This option can reduce your current federal taxable income. You don't pay income taxes on your contribution or any earnings they accumulate until you make a withdrawal.
- After-tax savings option - While you won't benefit from a reduction of your current federal taxable income, eligible withdrawals are tax free.
Your contributions are made after pension contributions and Social Security and Medicare taxes are deducted from your pay, so your participation in this plan will not affect pension or Social Security benefits.
Because this plan is designed for retirement savings, funds are not available until termination of employment, retirement, death, or in the event of an "unforeseen financial emergency" (as defined by the IRS).
The minimum amount you may contribute per pay period is $10. The maximum amount you may contribute in 2020 is $19,500. Employees who are 50 or older can contribute $26,000 in 2020. If you are within three years of your normal retirement age (the age you are eligible for unreduced pension benefits), a "catch-up" provision may apply. Under federal law, the contribution limits are adjusted annually for inflation.
Enrollment and Changes
The Minnesota State Retirement System (MSRS) is responsible for the day-to-day administration of the MNDCP. To learn more about the benefits of enrolling in the deferred compensation plan, visit the MNDCP website.
Information and the forms necessary to change your investment elections or contribution amounts are available on the forms section of the MNDCP website. You can also contact the MSRS Service Center any business day between 8 a.m. and 4:30 p.m. Central time at 651-296-2761 or 1-800-657-5757, option 3.
MSRS representatives will answer calls, review plan information, and process investment related requests.
Talk with the City's account manager
You can discuss how to set aside extra money for retirement through the deferred compensation plan with David Wrightsmith, the City’s account manager with the Minnesota State Retirement System (MSRS). You can also ask questions about enrollment or review your deferred compensation plan. Schedule a phone appointment on his website. New dates and times are added periodically.
Wrightsmith does not work on commission, and his only goal is to help you make the best decisions for your financial future. If you need to reschedule or cancel your appointment, email [email protected].
Last updated May 14, 2020