When you retire, your monthly benefits from the State Employees Retirement System and Social Security may not fully replace your current income. Defined contribution plans are a great way build additional resources to bridge that gap. The State of Connecticut’s voluntary retirement plans are defined contribution plans that allow you to save at a rate you choose and make investments you select.
Under the plans, you can contribute part of your salary to an individual account on a pre-tax basis. That means you pay no taxes on the portion of salary you contribute while you’re working, and that gives your contributions more growth potential as investments. You may contribute as much or as little as you choose, subject to limits imposed by federal law. Your contributions are invested in ways that you choose. When you begin to withdraw your savings after retiring, your tax rate might be lower than the rate you are paying now.
If you prefer, you may make your contributions on a post-tax basis. (Post-tax contributions will not be taxed when you withdraw them after retirement.) You can even make a combination of pre-tax and post-tax contributions.
All State employees, including members of the State Employees Retirement System, are eligible to participate in the State of Connecticut 457 plan. Employees of certain state educational institutions and hospitals may participate in the State of Connecticut 403(b) plan, in the 457 plan, or in both. The choice is entirely yours.
Click on the links below to learn more about these plans.
The State of Connecticut 457 plan is a voluntary, deferred compensation plan open to all State employees. The 457 plan gives employees the opportunity to save for retirement, supplementing their mandatory retirement plan. The 457 is a tax-advantaged plan. Employees may choose how much to contribute and whether to contribute on a pre-tax basis, on an after-tax basis (Roth), or with a combination of the two methods. Contributions are vested immediately and are deducted directly from the employee’s paycheck. The 457 plan is administered by Empower. For more information, please visit CTDCP.com.
Eligibility: State employees aged 18 or over, except rehired retirees and non-resident aliens.
Eligibility begins on first day of state employment.
Plan offers:
Special Three-Year Catchup option
Catch-up contributions for age 50 and over
Annual IRS limit determines maximum contribution
Loans available to all active employees enrolled in the plan
Unforeseeable emergency
The funds in your 457 account may be distributed after you terminate your state employment, whether by retirement or otherwise. While you are employed, you may withdraw funds from your account in the event of an unforeseeable emergency, subject to approval by the plan administrator. In certain circumstances, a member who is still employed may also make a one-time withdrawal of $5,000 or less. Additionally, employees who are age 59½ or older may withdraw funds while still employed.
The State of Connecticut 403(b) plan is a voluntary retirement program that is open to employees of certain state educational institutions and hospitals (link to full list). The 403(b) plan gives employees the opportunity to save for retirement, supplementing their mandatory retirement plan in SERS, ARP, or TRS. The 403(b) is a tax-advantaged plan. Employees may choose how much to contribute and whether to contribute on a pre-tax basis, on an after-tax basis (Roth), or with a combination of the two methods. Contributions are vested immediately and are deducted directly from the employee’s paycheck. The 403(b) plan is administered by Empower. For more information, please visit CTDCP.com.
*Non-resident aliens are ineligible
Only employees of the following State of Connecticut agencies are allowed to participate in the 403(b) plan:
- University of Connecticut, including the University of Connecticut Health Center
- State universities, including the Board of Regents
- Community and technical colleges, including the boards of trustees
- Department of Higher Education
- Department of Education, including the vocational/technical high schools
- Board of Academic Awards