|Effective Date:||Expiration Date:||Chapters:|
|Aug. 23, 2019||When Superseded||26|
The District is committed to helping employees build retirement wealth and security. The 457(b) Deferred Compensation Plan (457(b) Plan) is designed to supplement an employee's retirement savings. On July 7, 2019, the D.C. Department of Human Resources (DCHR) launched the 457(b) Plan Automatic Enrollment Program for District agencies.
All District government employees are eligible to participate in the 457(b) Plan EXCEPT:
The 457(b) Plan is a tax-deferral plan that allows participants to contribute part of their pay check (up to the maximum deferral amount) into a retirement account. All eligible newly hired and rehired employees will be automatically enrolled in the 457(b) Plan. Eligible employees will have deferrals withheld from their pay check no later than the first pay period after the effective date of their appointment.
Participants who are automatically enrolled will have five percent of their annual salary contributed to the 457(b) Plan as a pre-tax contribution each pay period.
Each automatically enrolled participant will receive documentation relating to the 457(b) Plan by the effective date of their appointment. This documentation explains:
Participants who are automatically enrolled must acknowledge in writing that they received this documentation. A legal guardian’s signature is needed if the eligible participant is under 18 years of age.
Participants may elect to defer a different amount to their plan, or to cease making deferrals. An employee who opts out of automatic enrollment may elect to participate again in the 457(b) Plan after a period of 30 days. An eligible employee who was not automatically enrolled in the 457(b) Plan may elect to participate at any time. Eligible employees may elect to participate in the 457(b) Plan by completing a Salary Deferral Agreement through the Employee Self-Service (ESS) portal in the PeopleSoft System. The agreement includes:
A participant may designate all or a portion of their deferral amount as a Pre-Tax Deferral or as a Roth Deferral. Participants may change their deferral amount by completing the Salary Deferral Agreement. The change will take effect no earlier than the first day of the first pay period following the date the agreement is executed in ESS.
Participants may defer more than the annual deferral limit if they qualify to use one of the following “catch up” provisions:
Any deferral that exceed the maximum amount authorized will be refunded to the participant.
For employees of the Council of the District of Columbia, the Office of the District of Columbia Auditor, and the Office of Advisory Neighborhood Commission, the District government matches employees’ 457(b) Plan deferrals, up to three percent of the employee’s base salary per pay period. The District will match these deferrals by making contributions to the 401(a) Plan within 45 days after the end of each pay period.
The District does not match deferrals made to 457(b) Plan accounts for any other employees.
Participants will be given an opportunity to direct investments of their respective accounts to one or more of the investment funds offered by the 457(b) Plan.
If a participant did not direct how the funds are to be invested, their deferrals will be invested in the default fund selected by the 457(b) Plan provider until additional instructions are provided by the participant.
Participants may cancel their participation in the 457(b) Plan at any time, as follows:
A Participant’s enrollment in the 457(b) Plan terminates when one of the following occurs:
Participants who cease to be eligible to participate in the 457(b) Plan, but who remain employed with the District, are entitled to withdraw all funds from their account upon separation of employment, except as outlined in the 457(b) Plan Automatic Enrollment Program section.
An automatically enrolled participant who elects to cease deferrals during the first 30 days of employment may request a refund of any deferrals made to their account within that period. Refunds will be adjusted for any earnings or losses at market value and will be taxable in the year they are distributed to the participant. To request a refund of deferrals, contact DCHR’s Benefits and Retirement Administration at firstname.lastname@example.org or (202) 442-7627.
An automatically enrolled participant who does not opt out within the first 30 days of employment is not eligible for a refund and will be subject to the 457(b) Plan’s normal distribution rules. For additional information, see the distribution options section.
Refund requests will be processed within 60 days of receipt of a request to withdraw deferrals.
Participants may not withdraw funds from their account, except under the following circumstances:
Participants may elect the time (month and year) when distributions under the 457(b) Plan will begin. The date must be the earlier of:
Roth deferrals and associated earnings may be withdrawn tax free if:
If a participant dies before distribution of their account, then the beneficiary must submit a death certificate proving the death of the participant before distribution of the participant’s account.
Participants may request a distribution due to a severe financial hardship by applying for an emergency withdrawal using the “District of Columbia 457(b) Deferred Compensation Plan, Application for Unforeseeable Emergency Withdrawal Form,” available at http://www.dcretire.com.
Participants eligible to receive a distribution may choose from the following options:
Direct rollover to another employer-sponsored, eligible retirement plan or to a traditional IRA.
Participants in the 457(b) Plan may increase, reduce, or cease the amount of their deferral through ESS in PeopleSoft. To stop or change the deferral amount, follow the steps in the How to Change Your 457(b) Plan Contribution Guide. Participants may also contact the DCHR Benefits and Retirement Administration at email@example.com or (202) 442-7627. Automatically enrolled participants can only request a refund of their deferrals, if they opt out of the plan within the 30 days of employment.
Participants may obtain additional information on the 457(b) Plan, including frequently asked questions at https://dchr.dc.gov/page/457b-deferred-compensation-plan or www.dcretire.com.
Any questions related to the content of this issuance should be directed to the DCHR’s Benefits and Retirement Administration at firstname.lastname@example.org or (202) 442-7627.
Issued by Director Ventris C. Gibson, D.C. Department of Human Resources on Aug. 23, 2019, midnight