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457(b) plan

Welcome to the Metropolitan Water Reclamation District of Greater Chicago Deferred Compensation Plan retirement plan. Click below to view the features and highlights of your employer’s retirement plan.

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.

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Participation

You are immediately eligible to participate in the plan and may begin contributing to the plan upon enrollment. 

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.

Catch-up contributions

You may be able to contribute up to an additional:

2024 catch-up contributions

> $23,000 if you have undercontributed in prior years and are within the last three taxable years before ending the year before the year you attain normal retirement age as specified under the plan, or

> $7,500 if you are age 50 or older

If you are eligible for both, you cannot combine the two catch-up amounts, but may contribute up to the higher amount. Please consult a tax professional to determine which catch-up contribution option would work best for your financial situation.

Pretax or Roth contributions

You have a choice regarding your elective contributions. You can direct all of your contributions to a traditional pretax account, to a Roth account or to a combination of the two. Contributions to a Roth account are after-tax. Regardless of your election, you are subject to the annual contribution limits detailed previously.

Account consolidation

You might be able to transfer your vested retirement account balance from a prior employer’s plan to your Metropolitan Water Reclamation District of Greater Chicago 457(b) Plan with Corebridge Retirement Services. This may be a way to simplify your financial profile and to ensure your overall investments are suitably diversified and consistent with your investment preferences. However, before moving funds, check with your other provider to determine if your account has any restrictions, imposes a withdrawal penalty or provides favorable terms. If distributions from the prior plan are subject to the 10% federal early withdrawal tax penalty, they will continue to be subject to the penalty after the rollover (even if the penalty did not apply due to severance from employment at age 50 or 55).

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 own contributions as well as any rollover contributions plus any earnings they generate.

Withdrawal restrictions

Your plan was established to encourage long-term savings. However, unlike many other plan types, there is no 10% federal early withdrawal tax penalty for early withdrawals in the 457(b) plan except on amounts rolled over from other non-457(b) eligible retirement plans and withdrawn prior to age 59½.

Generally, depending on plan provisions, you may withdraw your vested account balance if you meet one of the following requirements:

  • Retirement or severance from employment
  • Unforeseeable emergencies
  • Your death
  • Your disability

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.

Distribution options

Your plan offers many distribution options, allowing you to tailor your benefits to meet your individual needs. Depending on plan provisions, your withdrawal options include:

  • Transferring or rolling over your vested account balance to another tax-advantaged plan that accepts transfers of rollovers
  • Electing systematic or partial withdrawals
  • Taking a lump-sum distribution
  • Choosing one of the many annuity options available
  • Required Minimum Distribution (RMD) withdrawals

Generally, income taxes must be paid on all amounts you withdraw from your plan. Roth contributions generally are not subject to income taxes.

Consult your financial professional for more specific information.

 

An array of investment choices  

Performance 

You decide how to invest all contributions among the mutual funds and the Fixed-Interest Option* offered under the Metropolitan Water Reclamation District of Greater Chicago.

The wide array of mutual fund investment options available in your 457(b) retirement plan will 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. 
 

Remember, this plan represents a long-term investment. Investment values of the mutual funds you choose will fluctuate, and there is no assurance that the objective of any fund will be achieved. Mutual fund shares are redeemable at the-then current net asset value, which may be more or less than the original cost. Bear in mind that investing involves risk, including possible loss of principal.
 

* Policy Form series GFUA- 315, a group fixed unallocated annuity issued by The Variable Annuity Life Insurance Company, Houston, Texas.
 

Guided Portfolio Services®

Guided Portfolio Services (GPS) is an optional service that offers two approaches to help you achieve your retirement goals. One approach is for do-it-yourselfers. The other is great for those who prefer to have someone else do it for them. Both approaches deliver objective advice from independent financial expert, Morningstar Investment Management LLC, including how much to save, which investments to choose, and how much to invest in each.

 

GPS is offered through VALIC Financial Advisors, Inc. and is available for an additional fee. For more information, contact your local financial professional.
 

Fixed-Interest Option transfer restrictions

Generally, participants may transfer assets from the Fixed-Interest Option into equity options at any time and, after 90 days, from equity options into another fixed-income option such as a money market fund, a stable value fund or certain short-term bond funds, if such “competing options” are allowed in the plan.

RO 2933713 (06/2023)