Deferred compensation

Deferred compensation is an IRS section 457(b) retirement plan. All employees may voluntarily participate in deferred compensation to save for retirement.

  • Invest a portion of your after- or before-tax salary
  • Determine your contribution amount
  • Choose the plan vendor/s (Fidelity, MNDCP, VOYA) for your contributions
  • Investment earnings accumulate tax-free. No income tax is paid until you withdraw the money, typically at retirement when you may fall into a lower tax bracket.

Select from the options below for additional information about how to enroll, transfer accounts from one vendor to another, change a beneficiary, defer severance pay, annual contribution limits, etc.

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Enroll and vendor contacts

Step one

Contact your choice of deferred compensation vendor/s from the list below to set up an account, select investment option(s) and designate beneficiaries. You may set up an account and contribute to any or all vendor/s.

Fidelity

  • Fidelity website
  • Call 1-800-343-0860
  • To meet with a Fidelity representative, call 1-800-642-7131

Minnesota Deferred Compensation Plan

  • MNDCP website
  • Call 651-296-2761 or 1-800-657-5757 (toll free)
  • To meet with a MNDCP representative, contact David Wrightsmith at 612-964-8094

VOYA

  • VOYA website
  • To meet with a VOYA representative, call 612-492-0202
  • A VOYA representative is available every Wednesday from 9 a.m. to 12 p.m. in the HealthWorks Office, Government Center, Southwest street level

All three vendors will meet with employees upon request.

Step two

After account is set up, email cheryl.arntson@hennepin.us to begin payroll deductions in APEX with the following information:

  • Employee name and ID number
  • Dollar amount of after-tax contribution (Roth) to be deducted per pay period
  • Dollar amount of before-tax contribution to be deducted per pay period
  • Vendor(s) for after-tax contributions (Roth)
  • Vendor(s) for before-tax contributions

Deductions will begin the month following receipt of email request.


After-tax contributions (Roth)

On and after 6/1/2015, employees will have the additional choice of making after-tax contributions (Roth) in the deferred compensation plan.

After-tax (Roth) deferred compensation contributions are regulated under Internal Revenue Code 457(b) and are not Roth IRA contributions.

Roth IRA and Deferred Compensation Plan Comparison (XLSX)

  • The total of an employee’s annual contribution (both after- and before-tax contributions) may not exceed the annual IRS annual contribution limit
  • Employees may choose the same or different plan vendors (Fidelity, MNDCP, VOYA) for their after- and before-tax contributions; for example, after-tax in Fidelity and before-tax in MNDCP or any other vendor/contribution combination
  • Employees may continue to change vendors within the deferred compensation plan, transferring after- and before-tax contribution amounts from one vendor to another 
  • Employees may not transfer or change before-tax contributions to after-tax contributions or after-tax contributions to before-tax contributions.
  • No withdrawals of any deferred compensation contributions are allowed unless employee has resigned or has received an approved hardship withdrawal

Contribution limits

The Internal Revenue Service (IRS) announced the contribution limits for calendar year 2017:

  • Participation age = under age 50: maximum limit = $18,000 (2016 = $18,000) 
  • Participation age = age 50 and over: maximum limit = $24,000 (2016 = $24,000)
  • Catch-up provision*: maximum limit = $36,000 (2016 = $36,000)
    • The catch-up provision permits participants within three years of normal retirement age and under certain circumstances to contribute up to $36,000 (2016 = $36,000). You must contact your vendor if you want to use the 3-year Catch-up provision to determine how much you may contribute each of the 3 years.

The total of an employee’s annual contribution (both after- and before-tax contributions) may not exceed the annual IRS contribution limits.

Change payroll deduction

After your initial enrollment has been set up in APEX, complete these steps to make changes.

Use APEX to increase, decrease or stop your payroll deduction

  1. Click the My HR tab
  2. Click the Benefits Summary under Quick Links (left side)
  3. To change your after-tax contribution, click on Deferred Comp 457(b) Roth; for your before-tax contribution, click on Deferred Comp 457(b)
  4. Click the Edit button to change your deduction amount
  5. Type the new amount over the existing amount. Or, enter $0.00 to stop a deduction.
  6. Click the Save button
  7. Click the OK button to confirm your change
  8. Click Fund Allocations under Additional Information to check your vendor

Use APEX to change your vendor(s)

Before changing your vendor in APEX, set up an account with the new vendor.

  1. Click the My HR tab
  2. Click the Benefits Summary under Quick Links (left side)
  3. To change your after-tax contribution vendor Click on Deferred Comp 457(b) Plan Roth; for your before-tax contribution vendor Click on Deferred Comp 457(b)
  4. Click the Fund Allocations button under Additional Information
  5. Click the Change Current Fund Allocations button
  6. Enter the new percentage amount for each vendor and click Update Totals
  7. Click the Save button
  8. Click the OK button to confirm your change

Contact your vendor(s) directly to change your beneficiary/beneficiaries or investments.

Transfers, rollovers, withdrawals

Transfer from one plan vendor to another

Employees may transfer their after- and before-tax account balances between vendors within the deferred compensation plan at any time.

  1. Make sure you have a vendor account where your money is being transferred
  2. Contact your current vendor to request transfer paperwork to the new vendor
  3. Complete transfer paperwork and send to Benefits Division, Mail Code 040
  4. Benefits Division will sign and return paperwork directly to vendor
  5. Change your vendor in APEX (see Change payroll deduction/vendor/s for instructions)

Rollover from previous employer plan

Direct rollovers from certain qualified plans described in the Internal Revenue Service Code of 1986, as amended, are accepted. Email the HR Service Center for qualified rollover plan information.

  1. Set up your deferred compensation account
  2. Contact your account vendor to request rollover paperwork
    • You may need to contact your previous employer’s retirement plan for paperwork
  3. Complete rollover paperwork and send to Benefits Division, Mail Code 040
  4. Benefits Division will sign and return paperwork directly to vendor

Withdrawals

No withdrawals from deferred compensation are allowed unless employee receives an approved hardship withdrawal.

To request a hardship withdrawal from your vendor account:

Fidelity

  1. Email the HR Service Center and request a hardship withdrawal application
  2. You will be sent an application and additional instructions 

MNDCP

  1. Call MN State Retirement System (MSRS) at 651-284-7723

VOYA

  1. Email the HR Service Center and request a hardship withdrawal application 
  2. You will be sent an application and additional instructions

Rollovers/withdrawals after resignation or retirement

  1. Contact your deferred compensation vendor and request rollover or withdrawal paperwork
  2. Complete, sign and send to Human Resources Benefits Division, Hennepin County Government Center, A400, 300 South Sixth Street (MC040), Minneapolis, MN 55487-0040
  3. Benefits Division will sign and return paperwork directly to vendor
  4. Rollovers or withdrawals may not occur until your severance paycheck/s have been issued

Severance into deferred comp

If you participate in the county’s deferred compensation plan, you may be able to defer some or most of your severance pay and postpone federal and state tax liability. Social Security and Medicare taxes, if applicable, must still be deducted.

To defer your severance pay

If you have a deferred compensation account, contact your vendor directly to find out the amount you can defer.

If you don’t have a deferred compensation account, before your resignation or retirement date contact the vendor of your choice to set up an account, select investment option(s), designate beneficiary/beneficiaries and find out the amount of severance you can defer

Email cheryl.arntson@hennepin.us the following information:

  • Employee name and ID number
  • Resignation or retirement date
  • Amount of after-tax severance you want to defer
  • Amount of before-tax severance you want to defer
  • Vendor for after-tax severance contributions
  • Vendor for before-tax severance contributions

Email must be received before your resignation/retirement date or it cannot be processed.

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