The Elliot Health System 457(b) Plan is a deferred compensation plan, offered to certain highly compensated employees.
The 457(b) Plan differs from the 403(b)/401(k) Plan in that it is a non-qualified deferred compensation plan, not covered by ERISA. This means contributions to the Plan must be unsecured and subject to a “risk of forfeiture.” As an unsecured interest, amounts contributed to the Plan plus earnings are considered an asset of the employer and in certain circumstances, are subject to the rights of the general creditors of the organization. Additionally, payments made to you form the Plan are taxable upon distribution, unless you have an opportunity to transfer into another eligible 457(b) Plan.
Eligibility and Entry
Eligible employees may join the plan immediately upon hire. Enrollment is done on-line, directly with Principal Financial, via their website at www.Principal.com.
Salary Deferral Contributions
You may choose to defer a flat dollar amount of your pay each pay period. Your taxable income is reduced by the amount you contribute through salary deferral. This lets you reduce your current income taxes. Your total salary deferral is subject to IRS limits for the calendar year. Your maximum deferral amount may also be limited by IRS regulations.
Salary Deferral Changes
The salary deferral agreement must be completed before the beginning of the month in which your salary deferral contributions are to begin and before pay is made available. However, as a new participant, you may make a salary deferral contribution for the pay period in which you first become an eligible employee. You may stop making salary deferral contributions or change your amount at any time.
If you are within three years of normal retirement age (age 65), special catch-up contributions apply. If you qualify and are interested in contributing catch-up contributions, contact the Human Resources Department for details.
You are allowed to transfer into this plan all or a portion of an eligible 457(b) from a previous employer. Once transferred, you may not withdraw any portion of the transfer credit until you are entitled to receive benefits under the plan.
You are always 100% vested in the transfer contributions and the contributions you choose to defer.
You are able to direct the investment of your promised benefit by choosing among several fund options.
You may invest your contributions in any of the investment options offered by the plan. Contributions will be automatically directed to an investment default if you do not choose a different investment selection. You may also change your investment mix at any time. For more detailed information about your investment options, please log onto the Principal Financial website at www.Principal.com or contact Principal at 1-866-694-6386.
When You Receive Benefits
You may receive your benefit in a single lump sum cash payment or annual fixed period installments at:
- Termination of employment
- Plan Termination