Enrollment in the PERAPlus 401(k) and 457 voluntary retirement savings plans is available at any time. Both plans offer the same PERAdvantage investment options and Empower Retirement is the recordkeeper for both plans.
What is the PERAPlus 401(k) Plan?
With the PERAPlus 401(k), you can save additional money for retirement on top of what you contribute to your Defined Benefit (DB) or Defined Contribution (DC) account. Your contributions are automatically taken out of your paycheck and your employer may also make matching contributions on your behalf. You can choose from a selection of investment funds, including funds designed to become less risky (not as likely to be affected by ups and downs in the stock market) as you approach your projected retirement date.
A 401(k) is a tax-deferred (pre-tax) account, meaning you don't pay tax on the money you contribute; you'll only pay income tax on withdrawals you make from your account. However, a Roth (tax-paid) option is available (see below).
If you withdraw money from a 401(k) before age 59 1/2, you may be subject to a 10 percent early withdrawal tax penalty.
How to enroll
Enrollment is available for all employees of a PERA employer.
- Begin PERAPlus 401(k) Plan enrollment.
- If you are working for a PERA-affiliated employer but are not a PERA member, you may enroll by completing the 401(k) Participant Information Form.
What is the PERAPlus 457 Plan?
In addition to the PERAPlus 401(k) Plan, you may be eligible to contribute to the PERAPlus 457 Deferred Compensation Plan. The 457 Plan includes the same investment fund options as the PERAPlus 401(k) Plan.
A 457 plan is also a tax-deferred (pre-tax) account, and a Roth option is available as well (see below).
Unlike a 401(k), withdrawals from a 457 account are not subject to an early withdrawal penalty; however, you will still owe income tax on any withdrawals, regardless of when you make them.
How to enroll
Enrollment is allowed only if your employer has affiliated with the PERAPlus 457 Plan.
- Begin PERAPlus 457 Plan enrollment.
- If you are working for a PERAPlus 457 Plan affiliated-employer but are not a PERA member, you may enroll by completing the 457 Participant Information Form.
The PERAPlus 401(k) and 457 Plans also offer a Roth option that can help participants save toward the future and may also provide tax-free withdrawals at retirement. Unlike traditional PERAPlus 401(k)/457 pre-tax contributions, Roth contributions are taxed before the money is contributed to the Plan. Any earnings on Roth contributions grow tax-free and distributions will also be free of federal (and where applicable, state and local) income taxes, provided they are qualified distributions.
Roth contributions are only available to employees whose employers have adopted the Roth option.
The annual maximum contribution limits for the PERAPlus 401(k) and 457 Plans are:
|Total Contribution Limit for Each Plan (both Roth and pre-tax contributions count toward this limit)||$20,500|
|Catch-Up Contribution Limit (for participants age 50 and older who are contributing the maximum amount to the Plan)||$6,500|