What Is the 457 Plan from CalPERS?

The California Public Employees’ Retirement System Supplemental Income 457 Plan (CalPERS 457 Plan) provides a deferred compensation plan to a public agency and school employers and their employees. The plan is a low-cost, convenient way for employees to save for retirement through payroll deductions. CalPERS acts as the trustee for the deferred compensation assets. The program leverages payroll deduction feeds into individual accounts to receive deferrals and loan repayments, monitors contribution levels and chooses investment options. Since there currently are no minimum service requirements to fill, it’s in your best interest to find a municipal job and enroll in the 457 CalPERS Plan as soon as possible.

CalPERS Background

CalPERS is a not-for-profit entity focused on educating employees. CalPERS in-house investment staff and contracted external investment managers manage CalPERS 457 Plan funds. CalPERS believes in offering value and fair pricing. The entity doesn’t engage in revenue sharing or administrative expense reimbursement, so fees remain as low as possible. A simple and fair fee structure covers plan administration, record keeping, and investment fees.

Benefits for Employees

As an employee, the CalPERS 457 Plan offers a variety of benefits. For instance, you’re offered a very competitively priced retirement plan with low-cost investment options professionally managed by internal and external staff. The plan includes Target Retirement Date Funds created for public employees based on the most current research in portfolio theory and behavioral finance. Depending on contract provisions, your CalPERS 457 Plan may offer additional plan options such as loans, group and individual educational sessions by licensed representatives, and the latest in online retirement planning, investing, and educational tools.

Advantages of a CalPERS 457 Plan

As a deferred compensation plan, the CalPERS 457 Plan provides you with significant benefits. For instance, you may voluntarily defer part of your paycheck on a pretax basis. This reduces your income in the year you put money into the plan, lowering the amount you pay in taxes. Your contributions and earnings compound on a tax-deferred basis and are taxed when withdrawn, typically at retirement. If you’re retired, you should be in a lower tax bracket, allowing you to pay a lower amount in taxes and keep more of the income you earned. Also, you may withdraw money at a certain point and roll it over into an Individual Retirement Account (IRA) or other tax-advantaged retirement savings vehicle. If you don’t need the income at that point, your funds can continue to grow tax-deferred and potentially provide additional earnings. Plus, you should be able to withdraw funds before retirement for certain life events, such as purchasing a home, without incurring petalites. Keep in mind that you’ll be taxed according to your current tax bracket, which may be higher than during retirement.

Qualify for a CalPERS 457 Plan

When you find a municipal job through MuniTemps, you qualify for a CalPERS 457 Plan. If you have the dedication, commitment, and experience it takes to excel in local government careers, start working with us today. See which roles are available!


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