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457(b) Plan

Plan details

Welcome to your 457(b) retirement plan. Click below to view the features and highlights of your employer’s retirement plans.

The plan highlights are only a brief overview of the plan's features and are not a legally binding document. The information in this section does not modify the terms of the plan and in the event of a conflict, the terms of the plan control.

Take advantage today

Participation in the plan is open to all employees. 

There is no age or service requirement for eligible employees to participate in the 457(b) plan.  

You can join the plan on the first day of any calendar month.

Starting early has its advantages

Contributions

SECURE Act 2.0 of 2022 changed the timing of deferral elections for governmental 457(b) plans. You may now elect to defer a portion of your compensation any time prior to the date compensation becomes available. The maximum amount you are allowed to contribute to your 457(b) plan is based on your taxable compensation as defined by the Internal Revenue Code.

Generally, you can contribute up to 100% of your salary on a pretax basis, up to the maximum IRS contribution limit. Special catch-up provisions may also be available. Talk to your financial professional for more information.

2024 contribution limit

Your contribution limit for 2024 is $23,000.

If you have an existing qualified retirement plan (pretax) account or deferred compensation plan account with a prior employer or hold a traditional IRA account, you may transfer or roll over that account into the plan on becoming a participant in the plan. 

Important considerations before deciding to move funds either into or out of a Corebridge Retirement Services account
There are many things to consider. For starters, you will want to carefully review and compare your existing account and the new account, including: fees and charges; guarantees and benefits; and, any limitations under either of the accounts. Also, you will want to know whether a surrender of your current account could result in charges. Your financial professional can help you review these and other important considerations. Consult a tax professional before making a decision to move funds either into or out of a Corebridge account.

Can I stop or change my contributions?

You may stop, increase or decrease your contributions by giving notice to your employer. Your employer will change your contribution election as soon as administratively feasible after receiving your request. 401k and 403b plans allow participants to start and stop as they wish; that is now the same for 457b governmental plans.

Vesting

Vesting is a participant’s right of ownership to the money in his or her plan account. You are always 100% vested in your employee contributions plus any earnings they generate.

Withdrawals

Money can be withdrawn from the 457(b) plan in these events:

  • Death.
  • Severance from employment.
  • Unforeseeable emergency which is defined as a severe financial hardship resulting from a sudden and unexpected illness or accident (involving the participant or a dependent), a loss of property due to casualty, or other similar extraordinary and unforeseeable circumstances due to events beyond your control.

Income taxes are payable upon withdrawal and federal withdrawal restrictions apply to early withdrawals. Be sure to talk with your tax advisor before withdrawing any money from your plan account.  

In addition, the Internal Revenue Service (IRS) requires you to take Required Minimum Distribution (RMD) withdrawals from your retirement account(s) annually beginning the year you reach the RMD eligible age. RMD eligible age is:

  • Age 73 if you were born January 1, 1951, or later (The RMD eligible age will increase to age 75 after December 31, 2032)
  • Age 72 if you were born after June 30, 1949, and before January 1, 1951 (For individuals turning age 72 in 2023, no RMD payment is required in 2023)
  • Age 70 ½ if you were born before July 1, 1949.

Loans

The plan is intended to help you put aside money for your retirement. However, City of Foster City has included a plan feature that enables you to access money from the plan tax free without permanently reducing your account.

  • All loans will be limited to the lesser of: one-half of your vested account balance or $50,000.

  • All loans must generally be repaid within five years. A longer term may be available if the loan is to be used to purchase your principal residence.

  • You can have one loan outstanding at a time.

  • You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 2%.

  • A $50.00 processing fee for all new loans and a $30.00 per year loan maintenance fee are charged to your account.

Unpaid loan amounts will be taxed as ordinary income and may incur a 10% federal tax penalty if the employee is under age 59½.  

Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional. Refer to the Summary Plan Description for more details about this participant loan feature.

An array of investment choices

The following mutual funds and the Fixed-Interest Option are available in your retirement plan. They provide you with the flexibility you need to create a suitably diversified portfolio that matches your personal retirement time horizon, investment risk tolerance and investment preferences. 

You decide how to invest your plan account, selecting from investment choices provided under the plan, as determined by City of Foster City. You may change your investment choices anytime.

To view or print a prospectus, access, “Prospectuses and Other Important Materials”. The prospectus contains the investment objectives, risks, charges, expenses and other information about the respective investment companies that you should consider carefully before investing. Please read the prospectus carefully before investing or sending money. You can also request a copy by calling 1.800.428.2542.

View previous performance available in your 457(b) retirement plan.

RO 2933713 (06/2023)