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Flex Information

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    457 Retirement Plan

  • What are unique advantages of a deferred compensation plan?

    At early retirement or severance of service from your employer, distribution of the Plan can be made to you without the 10% IRS penalty tax usually associated with early distribution from other retirement plans, such as IRA's, 403(b) annuities or 401(k) plans.

    Most Deferred Compensation Plans offered are "Benefit Responsive" plans. This means there are no withdrawal or surrender charges when an employee receives benefits. Benefits are paid at death, disability, approved unforeseen emergency, retirement or severance from service.

    You can select from a wider choice of investment options for the Deferred Compensation Plans including fixed annuities, variable annuities, and mutual funds.

  • What is a deferred compensation plan?

    It is a voluntary salary reduction plan allowing eligible employees to defer current taxable income during peak earning years and accumulate funds for retirement. savings.

    These funds are set-aside for you as before-tax dollars reducing your current income tax liability and provides, through payroll deduction, the easiest way to accumulate savings for the future. Earnings on these funds are also tax deferred.

  • How are contributions made?

    You decide how much of your compensation you want your employer to contribute into the plan on your behalf, within limits established by the federal government.

  • Are there any limits to how much I can defer each tax year?

    Yes, for the year 2015 the lesser of $18,000 per year or 100% of includible yearly compensation.

  • I am contributing $9,500 into my 403(b). Can I participate in the deferred compensation plan?

    Yes, as long as your income permits, you may contribute up to the maximum in each plan as there is no longer a coordination of benefits.

  • I am putting $10,000 a year into a 403(b) TDA and earning $35,000 per year. How much can I defer under the 457 Deferred Compensation Plan?

    Let's assume a gross salary of $35,000 and look at the following calculation:

    Gross Salary...-$35,000
    Less TRS:(6.4%)...-2,240
    Adjusted Gross Salary...- $32,760
    Maximum 457 allowed (2010)...-17,000
    403(b)...-10,000
    Total Contribution...-$27,000

    The above example is based on and employee who earns $35,000 and contributes $2,2208.33 per month, ($27,000.00 annually), to a 403b, 403(b)(7) or 457.

  • How often can I make changes once I have started contributing to the plan?

    You may increase, decrease, stop or re-start your deferrals during the calendar year as often as provided by your Deferred Compensation Plan, usually on an annual basis.

  • When are funds available from the plan?

    Distribution could be made at the time of any of the following:

    • Death
    • Disability
    • Approved Unforseen Emergency
    • Normal retirement
  • What choices do I have regarding payout options when I become eligible, at retirement or serverance from service?

    You can elect from the following:

    • Single lump sum of the entire account balance
    • Installment payments over a selected fixed period, such as 5, 10 years
    • Installment payments guaranteed for your lifetime or guaranteed over joint lifetime with your spouse
    • When you elect early retirement, payout can be deferred until a normal retirement age (not beyound age 70 1/2)
    • Account portability (transfer to TRS, IRA 403b, etc.)
    • Partial withdrawals
  • Can I take the funds without the 10% penalty tax usually associated with an IRA, 403(b) annuity or 401(k) pension plan if I terminate employment service before age 59 1/2?

    If you have already started receiving periodic payments, any remaining guaranteed payments will be made to your beneficiary at least as rapidly as the method in effect at your death.

    If you die before receiving any payments and your named beneficiary is your spouse, your spouse may choose to receive the money at a future date (not beyond age 70 ½) or any one of the same payout options shown in Question 9.

    • Single lump sum of the entire account balance
    • Installment payments over a selected fixed period, such as 5, 10 years
    • Installment payments guaranteed for your lifetime or guaranteed over joint lifetime with your spouse
    • When you elect early retirement, payout can be deferred until a normal retirement age (not beyound age 70 1/2)
    • Account portability (transfer to TRS, IRA, 403b, etc.)
    • Partial withdrawals
  • How often do I receive a statement of account for my deferred compensation plan?

    Quarterly statements of accounts will be provided which show the value of your account as of the end of each quarter.

  • How do I enroll?

    The only way to enroll is through an authorized representative of the program administrator, (First Financial Administrators, Inc.). Enrollment or changes in the program may be made during any open enrollment period as designated by your employer

  • Can I choose where the money is invested?

    Yes. You may choose to have your contributions invested in any of the funding alternatives approved by your employer.

  • How do I get more information?

    To get more information about the program or enrolling in the program, please contact the authorized representative from First Financial Securities of America.