November 2013 DC Update
Adding It Up: Giving Thanks
In the spirit of the season, we’d like to thank each and every one of you for your continued support of the deferred compensation plan. Saving extra money for retirement isn’t always easy – in fact, it requires a great deal of discipline and hard work – but we’re continually amazed by your results. In October alone, more than 32,000 Missourians contributed a combined $4 million in savings to the deferred compensation plan! Assuming the same contribution rate and a 7% annual rate of return, that would equate to almost $54 million in combined savings over one year. And if that contribution trend and assumed rate of return continued for 23 years – the average career length for a state employee in 2012 – those 32,000 Missourians will have accumulated a combined $2.7 billion in retirement savings. Those are savings that could translate to financial security and independence in retirement. As we turn our focus to December and the season of giving, remember that paying yourself first each and every month will be a gift that you can cherish for years to come. Thanks again for you continued participation in the deferred compensation plan.
2014 Contribution Limits and Change Reminders
The IRS announced that contribution limits for the 2014 tax year will not change. This means the elective deferral limit on contributions to the deferred compensation plan will remain $17,500*. In turn, participants using the Pre-Retirement Catch-up Provision – available in one or more of the three calendar years leading up to normal retirement age – can still save up to $35,000 (twice the maximum deferral). For participants 50 or older by the end of the calendar year, the Age 50 and Over Catch-up Provision limit will stay at $5,500.
2014 Contribution Limits
| Elective Deferrals |
$17,500 |
| Pre-Retirement Catch-up Provision |
$17,500 |
| Age 50 and Over Catch-up Provision |
$5,500 |
If you’re adjusting contributions for 2014, please remember to submit those changes by the end of December for them to be effective on the first paycheck in January. You can adjust contribution amounts online within Account Access or by calling the Plan Information Line at 800-392-0925.
When adjusting contributions, keep in mind that the amount you submit is what will be deducted from each paycheck. For instance, if an employee receiving a semimonthly paycheck would like to contribute $2,400 in the 2014 tax year, their contribution amount would be $100.00 ($2,400/24 pay periods).*
* Life insurance policy premiums paid through the deferred compensation plan are counted in the annual maximum amount.
The New and Improved Account Access
The IRS announced that contribution limits for the 2014 tax year will not change. This means the elective deferral limit on contributions to the deferred compensation plan will remain $17,500*. In turn, participants using the Pre-Retirement Catch-up Provision – available in one or more of the three calendar years leading up to normal retirement age – can still save up to $35,000 (twice the maximum deferral). For participants 50 or older by the end of the calendar year, the Age 50 and Over Catch-up Provision limit will stay at $5,500.
2014 Contribution Limits
| Elective Deferrals |
$17,500 |
| Pre-Retirement Catch-up Provision |
$17,500 |
| Age 50 and Over Catch-up Provision |
$5,500 |
If you’re adjusting contributions for 2014, please remember to submit those changes by the end of December for them to be effective on the first paycheck in January. You can adjust contribution amounts online within Account Access or by calling the Plan Information Line at 800-392-0925.
When adjusting contributions, keep in mind that the amount you submit is what will be deducted from each paycheck. For instance, if an employee receiving a semimonthly paycheck would like to contribute $2,400 in the 2014 tax year, their contribution amount would be $100.00 ($2,400/24 pay periods).*
* Life insurance policy premiums paid through the deferred compensation plan are counted in the annual maximum amount.
The New and Improved Account Access
Account Access – the secure online portal maintained by our record keeper, ICMA-RC – was recently redesigned with a fresh new look, improved navigation and enhanced functionality. Among the many changes, the redesign effort aimed to simplify the most common transactions and requests in an effort to improve your online experience. This short webinar highlights the major enhancements you can expect to see when you log on. After you’ve had a chance to tour the new site, please take a couple minutes to fill out the short survey available within the Account Access message center. Your feedback will help us address any unforeseen issues and make additional improvements to Account Access.
Online Seminar Enrollment
Informational seminars and one-on-one consultations with our education specialists are the cornerstone of the deferred compensation plan benefit. As a reminder, you can view and register for these educational opportunities on the plan’s website at www.modeferredcomp.org. Simply click the red Register for a Seminar button that appears at the top of every page and then click the Sign up for an Individual Appointment or Seminar link. You can search for the events in your area by entering a zip code and mile range. By providing your email address during the registration process, you will be emailed both a confirmation at the time of registration and a reminder a day prior to your scheduled event. These educational opportunities cover a wide range of financial topics and are sure to enhance your savings knowledge. Better yet, they are provided at no additional charge to you as a participant in the deferred compensation plan. Be sure to check the schedule often as 2014 dates will be added soon.
Stay Connected with the Plan
You can find the State of Missouri Deferred Compensation Plan on Facebook, Twitter and YouTube. Whichever you prefer, staying connected with the Plan is a great way to receive timely plan news, valuable savings tips and more.