457 Deferred Compensation Plan

Arlington County’s Deferred Compensation Plan is established under Internal Revenue Code (IRC) Section 457.

Download a printable version of the Plan Highlights

Download a printable version of the Plan Highlights in Spanish

Eligibility

All permanent employee are eligible.

Contributions

Contributions are voluntary; however, newly hired employees are automatically enrolled to contribute 2% of their gross pay on a pre-tax basis. You may change or stop this amount at any time in PRISM. Changes made by the last full week of the month are effective the first pay date of the next month.

You may choose to make pre-tax, Roth after-tax contributions or a combination of the two. Learn more about the differences between pre-tax and Roth after-tax contributions.

The maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here.

The County matches your 457 Plan contribution, up to $20/pay period, prorated for part-time employees. This matching contribution is deposited in your 401(a) Plan.

Beneficiaries

You may update your beneficiaries by logging into your account or by calling Voya at (800) 584.6001.

First time users

From the Account Log in area of the homepage, click Register Now and follow the prompts to register for online account access.

You will be asked to prove your identity by providing your Social Security Number and a Personal Identification Number (PIN) that was provided to you after you enrolled. If you don't have your PIN, you can follow the links to request a new PIN to be delivered to your mobile number, email or U.S. mail address on file.

Investments

You may select from a variety of investment options. Initially, your contributions are invested in a Target Date Fund* based on your birthdate. You may change this investment allocation at any time by logging into your account or by calling Voya at (800) 584-6001.

Schedule a meeting with a Voya Representative to learn more about your investment options and the fees associated with each option.

*Target Date funds target a certain date range for retirement, or the date the investor plans to start withdrawing money. Investors can select the fund that corresponds to their target retirement date. They are designed to rebalance to a more conservative approach as the date nears. An investment in the Target Date fund is not guaranteed at any time, including on or after the target date.

Loans

Loans are not permitted under the 457(b) Plan. To find out more information or to schedule an appointment, please contact your local Voya representatives.

Distributions

When can I receive a distribution of my benefits under the Plan?

  • Separation from employment
  • Death
  • Reaching age 70½
  • Incurring an unforeseeable emergency

In addition, if you have rolled amounts from another retirement plan into this Plan, you may take a withdrawal from your rollover account under the Plan at any time.

What is an Unforeseeable Emergency Withdrawal?
You may withdraw funds while you are still employed if you have an unforeseeable emergency. The IRS defines an unforeseeable emergency as a severe financial hardship resulting from: 

  • An illness or accident involving you, your beneficiary, your spouse or your dependent, or the spouse or dependent of your beneficiary;
  • The loss of your or your beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance, such as a result of a natural disaster); 
  • Funeral expenses of your spouse, dependent or your primary beneficiary  or of your beneficiary's spouse, or dependent;
  • Medical expenses that you, your beneficiary, your spouse or dependent, or the spouse or dependent of your beneficiary incur which are not reimbursed or compensated by insurance or otherwise, including nonrefundable deductibles, as well as for the cost of prescription drug medication;
  • Imminent foreclosure of or eviction from the your or your beneficiary’s primary residence; or
  • Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your or your beneficiary’s control. An unforeseeable emergency withdrawal from the Plan must also include supporting documentation substantiating the unforeseeable emergency.

When am I required to begin receiving distributions?
Individuals who reach age 72 after December 31, 2022, and age 73 before January 1, 2033 must begin to take distributions no later than the April 1st of the calendar year following the calendar year in which they reach age 73 or retire, whichever occurs later. The IRS imposes a 25% excise tax on the required amount if you do not take the required minimum distribution timely.

What are my payment options under the Plan?
When you are eligible you may choose from the following options: 

  • Lump sum, or partial lump sum distribution, in combination with other options.
  • Systematic withdrawal option (SWO) of a specific amount or over a designated period.
  • Distribution over your lifetime and/or the lifetime of your designated beneficiary.
  • Roll over eligible benefits into another employer-sponsored 401 qualified plan, a 403(b) tax deferred annuity plan, or another governmental 457 deferred compensation plan, or to a traditional or Roth IRA. Amounts rolled from a governmental 457 plan to another plan type will be subject to any applicable IRS 10% premature distribution penalty tax if distributed from the plan receiving the rollover prior to age 59½ (unless another IRS exception applies).

Once I choose a payment method, can I change how I’d like to receive my benefits?
Yes, unless you previously elected an annuity payout option. 

How will my deferred compensation benefits be taxed?
If you contribute on a pre-tax basis, you are taxed on your contributions and earnings when you withdraw your money. If you contribute on an after-tax basis to the Roth 457 Plan, your contributions are taxed at the time they are deposited. Earnings on the Roth 457 contributions are never taxed, if certain IRS conditions are met. For Roth distributions to be tax free, the first contribution must be held at least five years before the date of distribution and made for one of the following events: attainment of age 59 ½, disability, death or for certain first-time home purchases.

Voya does not offer tax or legal advice. You should consult with a tax advisor and /or tax attorney concerning your personal situation before making a financial/investment decision.

What happens if I die?
Your beneficiary must notify Voya of your death and they will be able to choose from a variety of options available. Special rules apply if there is no designated beneficiary or if you have designated a beneficiary that does not satisfy the IRS required minimum distribution rules.

Not FDIC/NCUA/NCUSIF Insured Not a Deposit of a Bank/Credit Union May Lose Value Not Bank/Credit Union Guaranteed Not Insured by Any Federal Government Agency

You should consider the investment objectives, risks, and charges and expenses of the variable investment options offered through a retirement plan, carefully before investing. The fund prospectuses and information booklet containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.

Group annuities and mutual funds offered through a retirement plan are intended as long-term investments designed for retirement purposes. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.

Voya StabilizerSM is offered under a group annuity contract. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject.