457(b) Plan

Below are the important features about the plan. This website is intended to be a summary of the plan provisions.  In the event that a conflict exists between the information contained within this website and the plan document, the plan document provisions prevail. For more information, please contact your local financial professional.  

Eligibility

All employees are eligible to participate in the Plan and defer payment of part of his or her compensation by enrolling in the Plan, with the exception of rehire retirees.

Contributions

Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits hereopens in new tab.

Rollovers into the 457(b) Plan

The City of San Mateo 457 Plan currently accepts rollovers from 457(b), 401(a), 403(b), and 401(k) plans. The City’s 457 Plan also accepts rollovers from Individual Retirement Accounts (IRAs) as well.

Please note: assets rolled over from non-457(b) plans into the 457 plan will remain subject to the IRS 10% premature distribution penalty tax for withdrawals taken prior to age 59 1/2, unless an IRS exemption applies.

Consider all of the aspects of each plan including fees, charges, expenses, underlying investment options and other features before making an investment related decision.

Required Minimum Distributions and Other Distribution Options Available

The City of San Mateo's 457 Deferred Compensation plan offers participants several distribution and withdrawal options based upon your status within the Plan. These distribution options fall into two categories:

Required Minimum Distributions (RMDs)

The IRS requires that distributions under a 457(b) plan begin when you attain age 73 or separate from service, whichever occurs later. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not timely distributed. These rules are referred to as IRS required minimum distributions (RMD). Retirement and severance from employment are both distributable events and participants can request a distribution after 30 days of the event.

Required Minimum Distributions (RMDs) are available to retired participants after attaining the age of 73.

Other Distributions Options

The City of San Mateo’s 457 Deferred Compensation plan also offers participants access to their account balances prior to age 73 for separated employees under either a full or partial account distribution.

Access to your account balance may be possible through the following options:
- Unforeseen Emergency Withdrawals 
- Loans
- Full or Partial Account Distributions

Withdrawal Charges

None.

Account Administrative Fee

An Asset Based Administrative Fee is deducted from your account monthly at an annual rate of 0.105% on all assets including assets held in Voya Fixed Plus III - 457/401.

Loans

Loans are not permitted.

Divorce

In the event of your divorce, the court may issue a domestic relations order that addresses the split of your account and the payment of a portion of your benefits to an alternate payee. Voya® will review your domestic relations order to determine whether it satisfies the Plan and IRS requirements for a Qualified Domestic Relations Order. If it does, and the alternate payee is your former spouse, he or she is entitled to elect immediate distribution of the amounts awarded under the QDRO. A spousal alternate payee is also eligible to rollover amounts awarded to another eligible retirement plan in which he or she participates. Please review the Human Resources Divorce Information before initiating the process.

To obtain additional information, including the paperwork Voya® will need from the City, please contact Voya’s Customer Service Center at (800)-584-6001.

Death Benefits

Upon your death, benefits would be payable to the beneficiary(ies) that you designated under the Plan. If the participant dies without naming a beneficiary or if the person(s) named are no longer alive at the time of death, the account balance will be paid to the estate of the participant in a lump sum. The Plan will provide a variety of payout options available for the payment of death benefits to beneficiaries. Your beneficiary must notify Voya Financial® of your death and make a payment election in accordance with the Plan.

Status Changes

If you have a change in status, your designation is not automatically updated. For example, if your spouse is your beneficiary, that designation is not void as a result of your divorce. Your ex-spouse would remain your plan beneficiary until you make a change to your designation. The beneficiary you designate under the Plan is separate from any designation you may have made under the City’s pension plan or other programs in which you participate.

If you are unsure who your current beneficiary is, you may contact Voya’s Customer Service Center at (800)-584-6001 for further information and assistance.

Taxation

Amounts distributed directly to you from the Plan will only be taxable to you when actually paid. Amounts will be reported on IRS Form 1099R, and will be subject to 20% federal tax withholding (to the extent that the distribution is rollover eligible). 457(b) plan benefits are not subject to the IRS 10% premature distribution penalty tax, even if distributed prior to attaining age 59½. Rollover amounts from a non 457(b) Plan will be subject to IRS 10% premature distribution penalty tax, unless an exception applies. In addition, distributions from the Plan can be rolled into other eligible retirement plans, 401(a), 401(k), 403(b), other governmental 457(b) plans or an IRA.

Consider all of the aspects of each plan including fees, charges, expenses, underlying investment options and other features before making an investment related decision.