The Ohio Deferred Compensation plan is a supplemental retirement plan specifically for Ohio public employees, explains the Ohio Public Employees Deferred Compensation Program. Through this voluntary 457(b) plan, employees can supplement an existing retirement or pension benefit with a payroll deferral. The money is tax-deferred, and employees save and invest these funds to provide extra income during retirement.Continue Reading
Ohio public employees who are eligible to participate in a state statutory retirement system are also eligible to participate in the deferred compensation plan, notes the Ohio Public Employees Deferred Compensation Program. When an employee withdraws funds from a deferred compensation account, the employee must pay taxes on these funds at the standard income tax rate. Employees cannot withdraw funds from this account until the termination of employment or in the event of an unplanned emergency. If an employee has stopped deferring for a minimum of two years, he is eligible to receive one small distribution of $5,000 or less if he is still a public employee.
The plan does not require employees to make minimum contributions, but maximum contribution limits apply, reports the Ohio Public Employees Deferred Compensation Program. Employees who meet catch-up qualifications are allowed to contribute higher amounts to the plan. Plan participants can choose to invest funds in a variety of ways, and accounts are protected from personal and employer bankruptcy.Learn more about Financial Planning