New Jersey Supplemental Retirement Plan

• Category: Corporations - Public - Retirement
• State: Multi-State
• Control #: US-CC-21-104
• Format: Word; Rich Text

Description

21-104 21-104 . . . Supplemental Executive Retirement Plan which permits eligible management and highly-compensated employees to receive benefits that will compensate them for limitations imposed by Sections 401(a)(17), 401(k), 401(m) and 402(g) of Internal Revenue Code on salary deferrals and matching contributions under 401(k) plan New Jersey Supplemental Retirement Plan (NJ SRP) is a retirement savings program offered to state and local government employees in New Jersey. It is designed to help eligible employees save additional funds for their retirement, on top of their primary pension plan. The NJ SRP functions as a voluntary salary reduction plan, allowing participating employees to contribute a portion of their salary into a tax-deferred retirement account. These contributions are deducted from their pre-tax income, and the earnings on the contributions grow tax-deferred until withdrawn during retirement. The plan provides employees with a powerful tool to accumulate additional savings, bolstering their retirement income. One of the prominent advantages of the NJ SRP is the ability to maximize tax savings. By contributing to the plan, employees can potentially reduce their current taxable income, resulting in lower tax liabilities in the present. Additionally, contributions and earnings within the plan are not taxed until the funds are withdrawn, allowing for potential tax savings in retirement when individuals typically fall into a lower tax bracket. New Jersey offers multiple options within the Supplemental Retirement Plan to cater to the diverse needs of employees. The main types of NJ SRP are: 1. Defined Contribution Plan: This is the core plan available within the NJ SRP. It enables employees to contribute a percentage of their salary to a retirement account, often with the option to choose from various investment options. 2. Deferred Compensation Plan: Offered as an additional choice within the NJ SRP, this plan allows employees to defer a portion of their salary to a separate account. The contributions made to this account can be invested in various investment vehicles, and the earnings grow tax-deferred until retirement. 3. Hybrid Plan: A hybrid plan combines elements of both defined contribution and deferred compensation plans. It allows employees to contribute a portion of their salary to a retirement account, while also having the option to defer additional compensation to a separate account. All types of NJ SRP, irrespective of the chosen plan, are designed to empower employees with an opportunity to build their retirement savings in a tax-efficient manner. The plan aims to provide financial security and peace of mind to New Jersey state and local government employees throughout their retirement years.

New Jersey Supplemental Retirement Plan (NJ SRP) is a retirement savings program offered to state and local government employees in New Jersey. It is designed to help eligible employees save additional funds for their retirement, on top of their primary pension plan. The NJ SRP functions as a voluntary salary reduction plan, allowing participating employees to contribute a portion of their salary into a tax-deferred retirement account. These contributions are deducted from their pre-tax income, and the earnings on the contributions grow tax-deferred until withdrawn during retirement. The plan provides employees with a powerful tool to accumulate additional savings, bolstering their retirement income. One of the prominent advantages of the NJ SRP is the ability to maximize tax savings. By contributing to the plan, employees can potentially reduce their current taxable income, resulting in lower tax liabilities in the present. Additionally, contributions and earnings within the plan are not taxed until the funds are withdrawn, allowing for potential tax savings in retirement when individuals typically fall into a lower tax bracket. New Jersey offers multiple options within the Supplemental Retirement Plan to cater to the diverse needs of employees. The main types of NJ SRP are: 1. Defined Contribution Plan: This is the core plan available within the NJ SRP. It enables employees to contribute a percentage of their salary to a retirement account, often with the option to choose from various investment options. 2. Deferred Compensation Plan: Offered as an additional choice within the NJ SRP, this plan allows employees to defer a portion of their salary to a separate account. The contributions made to this account can be invested in various investment vehicles, and the earnings grow tax-deferred until retirement. 3. Hybrid Plan: A hybrid plan combines elements of both defined contribution and deferred compensation plans. It allows employees to contribute a portion of their salary to a retirement account, while also having the option to defer additional compensation to a separate account. All types of NJ SRP, irrespective of the chosen plan, are designed to empower employees with an opportunity to build their retirement savings in a tax-efficient manner. The plan aims to provide financial security and peace of mind to New Jersey state and local government employees throughout their retirement years.