Deferred Compensation Plan In California
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Multi-State
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US-00418BG
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Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.
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The CalPERS 457 Plan is a voluntary deferred retirement savings plan that allows you to defer any amount, subject to annual limits, from your paycheck. The CalPERS 457 Plan provides employees a lowcost, convenient way to save for retirement through payroll deductions.A 457(b) plan is a tax-deferred retirement savings plan. Funds are withdrawn from an employee's income without being taxed and are only taxed upon withdrawal. Deferred compensation plans are designed for state and municipal workers, as well as employees of some tax-exempt organizations. You must complete the Leave Payout Deferral Form before your last day of employment if you want any leave payout to be deferred. If you wish to enroll in the 457 Deferred Compensation plan, download and complete the Enrollment Form.