Virginia Defined Contribution Plans

The minimum amount you can contribute is $10 per pay period. The maximum you can contribute is up to 100% of your includible compensation or $16,500 for 2009, whichever is less. Includible compensation is your actual compensation for a calendar year reduced by any amount you may have paid to purchase defined benefit plan service credit on a pre-tax basis.

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Are there any times when I can contribute more under the Plan?
Yes. You may contribute more in the following circumstances:

Age 50+ Catch-Up: If you are age 50 or over during the calendar year, you may contribute an additional catch-up amount of up to $5,500 for 2009 for a total contribution of $22,000.

457 Plan Standard Catch-Up: If you did not contribute the maximum amount to the Plan in previous years, you may make contributions up to twice the regular deferral limit or your catch-up credit whichever is less during the three calendar years prior to your designated normal retirement age. This is known as the Standard Catch-Up Provision.

Age 50+ and Standard Catch-Up Provisions may not be used in the same calendar year.

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Can I change the amount I contribute?

Yes. You can increase, decrease or suspend the amount you contribute to the 457 Plan at any time effective with the first available pay date in the following month. You can change your contribution amount by going to www.varetire.org. Select Commonwealth of Virginia Deferred Compensation Plan under the Defined Contribution Plans tab and log into your account using your PIN number. Or, you may call the Plan Information Line toll-free 1-VRS-DC-PLAN 1 (1-877-327-5261).

Federal regulations require that the change be effective no earlier than the first of the following month or the next available pay date if later.

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What happens to my account if I stop contributing?

Your account continues to accumulate tax-deferred until benefits are paid to you. Plan expenses and investment fees will still be charged to your account. As long as you are an employee of an employer that offers the Plan, you may restart your contributions online or by phone.

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Can a participant make contributions while receiving Virginia Sickness and Disability Program (VSDP) benefits?

Participants receiving short-term VSDP payments may contribute to the 457 Plan from their VSDP payments.

Participants on long-term VSDP may not contribute. Participants on long-term disability and working may contribute from their earnings.

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Can a participant in the 457 Plan make deferrals from pay that is derived from Workers’ Compensation?

No. Workers’ Compensation is comparable to an insurance benefit and is not considered taxable compensation eligible to be deferred to the Plan.

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Can Workforce Transition Act (WTA) severance benefits be contributed to the 457 Plan?

No. WTA severance benefits do not meet the definition of compensation.

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If an employee directs that his 457 Plan contribution is more that the money available for the pay date, how much is sent to the Plan?

If the contribution that the employee directs to be made to his 457 Plan account is more than his compensation for the pay date, no contributions will be sent to the Plans.

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Can employers make contributions to the 457 Plan on behalf of their employees?

Yes. Employers may make non-elective contributions to the 457 Plan. Employers use this option to structure benefit packages and to contribute amounts that cannot be contributed to an Optional Retirement Plan because 401(a)(17) compensation limits have been reached. Employer non-elective contributions count toward the contribution limit for which the employee is eligible.

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