Edited by LM 3/5/25


Deferred Compensation Plan


Eligible employees can set aside a portion of their income either before or after taxes for a future date.
Effective as of January 1,

The State of Alaska 457 Deferred Compensation Plan (DCP) allows you to voluntarily set aside a portion of your income either before it is taxed or after it has been taxed. The amount set aside, plus any change in value (interest, gains and losses), is payable to you or your beneficiary at a future date. Upon becoming eligible to participate in the Plan, you may elect to defer your income on a pre-tax or post-tax basis. By doing so, you agree to reduce your salary by an agreed-upon amount. Any permanent employee, long-term non-permanent employee, elected official of the State of Alaska, or employee of a participating public or political subdivision is eligible to participate in the plan.

Under this plan, you may also request a one-time leave cash in of your personal leave to apply towards your DCP account, contact the Deferred Compensation Unit at . Please include the following:

  • A unique identifier, this may be your RIN/EID, last 4 of your SSN, DOB or physical address.
  • The number of Personal Leave hours, or value of personal leave hours, you would like to roll into your Deferred Compensation account (if you wish to maximize your DCP contributions for tax year, you can reply: “Maximum”).
  • If you would you like your Deferred Compensation leave cash-in to be PRE-TAX or ROTH (after-tax).
  • If you would like to continue your payroll deductions. We will not shut off your payroll contributions, but if you are contributing to the maximum, this information will be used to determine the cash in hours needed.

Utilizing a leave cash in request for contributions towards a ROTH (post tax) account, you will need to account for taxes and SBS/Medicare deductions, the options are:

  1. Taxes for X hours to come out of your payroll check. Your payroll check will be smaller than normal. Value of X hours will go to your DCP ROTH account. You will not be able to select this option if the amount of tax due is greater than your paycheck.
  2. Taxes to come out of X hours. Your payroll check will be close to normal. Less than X hours will go to your DCP ROTH account.
  3. Taxes for X hours to come out from your leave balance. Your payroll check will be close to normal. More than X hours will be taken from your leave balance to cover the taxes and mandatory SBS/Medicare deductions.

Plan Administrator

Empower Retirement Services processes all payments for the PERS/TRS Defined Contribution Retirement (DCR) plan, the Supplemental Annuity (SBS-AP) plan and Deferred Compensation Plan (DCP).

Empower Retirement Services

  • Account: akdrb.com
  • Local to Anchorage:
  • Customer Service:
  • TTY:
  • Hours:
    Mon-Fri: 4 a.m. - 6 p.m., Sat: 5 a.m. - 1:30 p.m. AK
  • Email:
  • PIN: Request a PIN

Empower Automated Functions

  • Current account balance
  • Current interest rates
  • Current unit values or share prices
  • Current account balance by fund
  • Current fund allocation
  • Recent transaction history
  • Change investment fund allocation
  • Transfer among investment funds
  • Rebalance portfolio
  • Change a PIN
  • Order a copy of existing PIN

Plan Expenses

There are no front-end loads for investment. Your account has an annual record-keeping/administration fee of 0.1275% (0.001275 of 1%), which is assessed to your account monthly. In addition, the funds have annual investment expenses that vary depending upon the fund you choose. The returns are net of these costs. The plan may also charge fees for using specific plan features.

The Deferred Compensation Plan maximum amounts that can be contributed for is as follows:

  • The base maximum contribution is $23,500.
  • Participants are allowed to contribute an additional $7,500 between the age of 50-59 or age 64 and over for an annual maximum contribution of $31,000. This represents the annual allowable of $23,500, plus the additional $7,500.
  • Participants Age 60-63 are allowed to contribute an additional $11,250 for an annual maximum contribution of $34,750.
  • The Special 457 Catch-up (Three Year Provision) contribution limit is $47,000. This represents double the annual maximum of $23,500.

You may increase or decrease your DCP contribution amount once per month.

DCP Plan Limitation Base Maximum Contribution Catch-up Age
50 and Above
Catch-up Age
60-63
Three Year Catch-up Provision
2025 $ 23,500 $ 7,500 $11,250 $ 47,000
2024 $ 23,000 $ 7,500 N/A $ 46,000
2023 $ 22,500 $ 7,500 N/A $ 45,000
Prior to CY 2025, the catch-up contribution limit was based on age 50 and above

Past DCP Contributions and Annual Limits

2022 - 2015
DCP Plan Limitation Base Maximum Contribution Catch-up Age 50 and Above Catch-up Age 60-63 Three Year Catch-up Provision
2022 $ 20,500 $ 6,500 N/A $ 41,000
2021 $ 19,500 $ 6,500 N/A $ 39,000
2020 $ 19,500 $ 6,500 N/A $ 39,000
2019 $ 19,000 $ 6,000 N/A $ 38,000
2018 $ 18,500 $ 6,000 N/A $ 37,000
2017 $ 18,000 $ 6,000 N/A $ 36,000
2016 $ 18,000 $ 6,000 N/A $ 36,000
2015 $ 18,000 $ 6,000 N/A $ 36,600
Prior to CY 2025, the catch-up contribution limit was based on age 50 and above
2014 - 2008
DCP Plan Limitation Base Maximum Contribution Catch-up Age 50 and Above Catch-up Age 60-63 Three Year Catch-up Provision
2014 $ 17,500 $ 5,500 N/A $ 35,000
2013 $ 17,500 $ 5,500 N/A $ 35,000
2012 $ 17,600 $ 5,500 N/A $ 34,000
2011 $ 16,500 $ 5,500 N/A $ 33,000
2010 $ 16,500 $ 5,500 N/A $ 33,000
2009 $ 16,500 $ 5,500 N/A $ 33,000
2008 $ 15,500 $ 5,000 N/A $ 31,000
Prior to CY 2025, the catch-up contribution limit was based on age 50 and above

Catch-Up Provisions

The catch-up provision is only available to participants as early as three years prior to their eligibility for normal retirement (either by age or years of service), and allows making up prior deferred compensation contributions that were less than their allowable maximum in years since January 1, 1979.

You may contribute under the catch-up provision for a maximum of three consecutive years. Once you elect catchup, if you do not utilize it for all three consecutive years, you cannot make up the amounts not utilized at a later time or with another employer.

If you are interested in knowing your total available catch-up balance or have any other questions regarding the catch-up provision, please email or call Empower Retirement above.

A comprehensive statement of your account will be mailed to you each quarter. If you prefer not to have your statements mailed, you can sign up to use the Online File Cabinet® for your account at the Empower Retirement Services website.

Special Catch-Up Provisions

The special catch-up provision is only available to participants as early as three years prior to their eligibility for normal retirement (either by age or years of service), and allows making up prior deferred compensation contributions that were less than their allowable maximum in years since January 1, 1979.

You may contribute under the special catch-up provision for a maximum of three consecutive years. Once you elect catchup, if you do not utilize it for all three consecutive years, you cannot make up the amounts not utilized at a later time or with another employer.

Please note that the age 50 and over catch-up and the regular catch-up provisions cannot be used in the same year.

If you are interested in knowing your total available catch-up balance or have any other questions regarding the catch-up provision, please email or call Empower Retirement above.

A comprehensive statement of your account will be mailed to you each quarter. If you prefer not to have your statements mailed, you can sign up to use the Online File Cabinet® for your account at the Empower Retirement Services website.

Before Tax Savings

Contributions to your account made under the pre-tax option reduces your taxable income for the year. These contributions and all associated earnings are then not subject to tax until you terminate employment and withdraw them.

After Tax Savings

The Deferred Compensation Plan has a Designated Roth 457 option that permits contributions to the plan on an after-tax basis. The Roth deferrals and associated earnings can be withdrawn tax-free in the future if the requirements for a qualified distribution are met. You may designate all or a portion of your contributions to the Designated Roth Option.

A Roth 457 is not a Roth IRA. Neither is a Roth 457 a separate plan; it is simply a way for employees to control the taxation of their deferred wages when they are disbursed in the future. This option allows employees to elect after tax salary deferrals into a Roth option. Roth elective deferrals are accounted for separately from the pre-tax contributions made to the plan. Distributions from the Roth 457 are tax free if the contributions have been in the Roth elective deferral account for at least 5 years and the participant is at least 59 ½.

The DCP is a participant-directed plan. This means that you choose from the investment options offered by the Plan. The providers of these investment options are selected by the Alaska Retirement Management Board. Investment options are described in detail in the Plan Information Booklet and in the individual Fund Overviews, which are available on the Empower Retirement Services website by selecting "Investment information" under the "Investing" menu.

Once contributions have been allocated among these funds (in whole percentages ranging from 0% to 100%), you may make transfers among existing fund options and allocation changes for future contributions once a day. There is no extra charge for daily changes. Funds may impose redemption fees, and/or transfer restrictions, on certain transfers, redemptions or exchanges if assets are held for less than the period stated in the fund’s prospectus or other disclosure documents. For more information visit the Empower Retirement System website or call Empower Customer Service at toll-free. Changes may be made through Empower's website, by telephone via Empower Customer Service, through a client service representative, or in writing.

Existing Investment Funds

The plan provides for many investment options. Carefully consider the investment objectives, risks, fees and expenses of the annuity and/or the investment options. Contact Empower Retirement for a prospectus, a summary prospectus and disclosure document, as available, containing this information. Read them carefully before investing.

  • Russell 3000 Index Fund
  • S&P 500® Index Fund
  • S & P SmallCap 600 Equity Index F
  • Environmental, Social and Governance Fund
  • Mid Capitalization Equity Index Fund J
  • U.S. Small-Cap Trust
  • World Equity Ex-US Index
  • International Equity Fund
  • FIAM Core Plus CIT C1 H
  • Passive US Bond Index Fund
  • Stable Value Fund
  • State Street Inst Treasury Money Market
  • Alaska Balanced Trust
  • BlackRock Strategic Completion NL F
  • Alaska Long-Term Balanced Trust
  • Alaska Target Date Retirement 2010 Trust
  • Alaska Target Date Retirement 2015 Trust
  • Alaska Target Date Retirement 2020 Trust
  • Alaska Target Date Retirement 2025 Trust
  • Alaska Target Date Retirement 2030 Trust
  • Alaska Target Date Retirement 2035 Trust
  • Alaska Target Date Retirement 2040 Trust
  • Alaska Target Date Retirement 2045 Trust
  • Alaska Target Date Retirement 2050 Trust
  • Alaska Target Date Retirement 2055 Trust
  • Alaska Target Date Retirement 2060 Trust
  • Alaska Target Date Retirement 2065 Trust



The DCP Plan is a participant-directed plan. You choose from the investment options offered by the Plan. You can invest your contributions in any of the following ways, depending on your knowledge and comfort level with researching and selecting investments.

Build and Manage Your Own Portfolio
You can build and manage your own portfolio by investing in one or more of your Plan’s investment options. The Plan offers investments in a mix of asset classes to help you create a portfolio that suits your retirement goals and risk tolerance.

The Alaska Retirement Management Board has selected the Plan’s investment options, which are described in detail in the Plan Information Booklet and in the individual Fund Overviews, which are available at akdrb.com by selecting Investment information under the Investing menu.

On akdrb.com , you can also find a variety of online calculators and planning tools to help you. From there, you select the investment options and implement your own retirement savings strategy.

How can I make changes to my investment selections?

You can move all or a portion of your existing balances among investment options and change how your future contributions are invested by visiting the website at akdrb.com or by calling the voice response system toll free at .

You can transfer assets among existing fund options and allocation changes for future contributions once a day at no charge. However, your chosen funds may impose redemption fees, and/ or transfer restrictions, on certain transfers, redemptions or exchanges if assets are held for less than the period stated in the fund’s disclosure documents. For more information, please refer to the fund’s disclosure documents at akdrb.com .

Point in Time Advice

Our Point-in-time advice is a powerful, phone-based service delivered by Empower’s Workplace Planning & Advice (WPA) Group, acting as a fiduciary. Point-in-time advice can provide you with specific recommendations based on information you provide and intended to serve your best interest.

Your Alaska Retirement Plan Advisors are also available to work with you. Their focus remains on helping to educate you about your options, so you can make informed decisions to and through retirement. However, if you occasionally need someone to just tell you what to do, point-in time advice is now here to help fill that gap.

Included in the services offered by WPA:

  • Assistance with how to invest your contributions from the options available in the State of Alaska fund lineup.
  • Roll-in help for participants who wish to consolidate assets. Consider all your options and their features and fees before moving money between accounts.
  • Advice determining how much to save in an optional plan, and whether you should contribute pre-tax or Roth.
  • Robust advice and counseling around distributions from the State of Alaska plans once you’ve left employment.
  • Help with your overall financial wellness and retirement readiness.

There is no additional cost for this advice. Call and schedule a meeting to talk about any of the above topics, so we can help you meet your retirement and financial goals.

The following transactions must be conducted through Empower Retirement Services:

  • Inactive and Retired Employees: Changing your address or your name. (Active employees: Contact your employer to change your address or name.)
  • Account Withdrawals: Empower Retirement Services processes all Plan payments. Empower Retirement Services should be contacted for information on how to complete disbursement forms and for the status of pending payments.
  • Hardship withdrawals

The Division of Retirement and Benefits is responsible for the overall administration of this plan. To contact the Juneau Division of Retirement and Benefits office, call , or from Juneau.

Distributions from your Pre-Tax Contributions

Funds may be withdrawn at any age in the event of:

  • Leaving State employment (including retirement)
  • Proven Unforeseeable Emergency (as defined by the Internal Revenue Code)
  • Death (after which your beneficiaries will take the withdrawal)

There are no withdrawal fees or IRS penalties for any benefit payable. All funds are subject to federal income tax as they are paid out. DCP monies can be transferred to another governmental 457(b) plan, an IRA or any other qualified plan that accepts them. If you roll over any governmental 457 dollars to another type of plan or account, the withdrawals made prior to you reaching age 59½ may be subject to a 10% federal early withdrawal penalty upon distribution from the non-457 account.

Distributions from your Post-Tax Contributions

Your Roth distributions are income tax-free if you withdraw your Roth contributions and any earnings after holding the account for at least five tax years and you meet one of the following:

  • You are at least age 59½.
  • You become disabled.
  • Death (after which your beneficiaries will take the withdrawal)

If a distribution is made from your Roth 457 account before you reach age 59½ and it is not due to death or disability or you have not reached the five-tax-year period beginning with your first Roth contribution, you will owe income tax on any earnings the Plan distributes. Otherwise, you do not owe income tax on the Roth contributions that the Plan distributes because you made these contributions with after-tax dollars.

Receiving Your Distributions

When you qualify for a distribution, your account value may be applied to the distribution option(s) you choose:

  • Deferred payment until you have obtained the age of Required Minimum Distribution
  • Lump-sum payment (full or partial)
  • Five, 10 and 15 year period-certain annuity
  • Single life annuity
  • Single life annuity with 10 or 15 year period-certain
  • 50% or 100% joint/survivor annuity
  • Periodic payment
  • Direct rollover to an IRA or other qualified plan

You are encouraged to discuss rolling money from one account to another with your financial advisor/planner and to consider any potential fees and/or limitations of available investment options.

You may begin receiving funds immediately or defer receipt until no later than April 1 of the year following the later of the year in which you turn 72 or the year in which you retire. You will be allowed to take partial distributions, and there is no limit on the number of payments that can be taken; however, if you do not receive payment of your entire account, you must maintain a minimum $1,000 account balance.

Hardship Withdrawls

There are strict provisions for hardship withdrawals. They can be requested from Empower Retirement Services, but you must prove you are experiencing an unforeseen and extreme financial emergency and provide evidence demonstrating that you have exhausted all other reasonable alternatives. This includes stopping your deferrals and cashing out the maximum allowable annual/personal leave.

An unforeseeable emergency which results in a severe financial hardship can result from any of the following developments:

  • An illness or accident of the participant, the participant’s spouse, or the participant’s dependent;
  • The loss of the participant’s property due to casualty, including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance (such as a natural disaster); or
  • Similar extraordinary and unforeseeable circumstances arising as a result of events beyond the participant’s or beneficiary’s control;

It takes an average of one to two months to obtain all the necessary information for a hardship withdrawal. Payments are usually issued within two weeks from the date the withdrawal is approved by the Plan.

General

In the event of an unforeseeable emergency which is beyond the control of the Participant and which causes extreme financial hardship, a participant may request Empower Retirement Services to distribute all or a portion of the Participant's Deferred Compensation account. Such request shall be made by completing and submitting all required forms for this purpose. The Participant must, prior to his application, cease deferring compensation in accordance with Paragraph F of Article III. If the application for the payment is approved by Empower Retirement Services, payments shall be effective as soon as possible after the date specified in the Participant's application or the date of approval by Empower Retirement Services, if later.

Unforeseeable Emergency Defined

The term "unforeseeable emergency" is defined to be severe financial hardship to the Participant or of a dependent (as defined in IRC Section 152(a)) of the Participant, loss of the Participant's property due to a casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved.

  1. through reimbursement or compensation by insurance or otherwise,
  2. by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
  3. by cessation of deferrals under the Plan.

Examples not considered to be unforeseeable emergencies include the need to send a Participant's child to college or the desire to purchase a home.

Demonstration of Need

A Participant requesting a hardship withdrawal by reason of an unforeseeable emergency must clearly demonstrate that the circumstances being experienced were not under the Participant's control and constitute a real emergency which is likely to cause the Participant great financial hardship. Empower Retirement Services may require such medical, financial, or other evidence deemed appropriate to make a determination concerning the Participant's withdrawal request.

Limit

The withdrawal shall be limited to an amount sufficient only to meet the emergency and shall in no event exceed the value of the Participant's Deferred Compensation account. Any money remaining in the account shall be distributed in accordance with the provisions of this Plan.

Method of Distribution

The method of distribution of any allowed withdrawal shall be determined by Empower Retirement Services.

Employees leaving state service can request to have a final deferred compensation contribution taken on their final payroll check. Your final check will include payment of any unused personal/annual leave in addition to your final pay. Some employees prefer to reduce their tax liability by deferring income from their final check into their deferred compensation account.

If you want to request this deferral, please complete the DCP Final Pay Form , and return it to the Division of Retirement and Benefits via fax or as a PDF file email attachment as noted on the form to the .


For employees not participating in the special catch-up provision of deferred compensation, the maximum total deferral for , including regular deferrals from normal payroll, leave cash-ins, and final check, based on age are, $23,500 for participants under age 50, $31,000 for participants aged 50-59 and 64+ or $34,750. Employees participating in the special catch-up may be eligible to defer as much as $47,000 in , depending on their prior deferred compensation deferrals. These dollar amounts may be adjusted each year by the IRS. Dollar deferrals are net (after deduction) of any required SBS and applicable Medicare deductions.

If you wish to defer the maximum amount (from both leave and pay) from your final check, you should check the top box on the form. The middle box should be used if you wish to defer a specific dollar amount (up to the maximum amount) from your final check.

If you wish to defer only the dollar value (net of any required SBS and applicable Medicare deductions) of your leave balance, you should check the bottom box on the form.

If you are not currently enrolled in the deferred compensation plan and wish to defer income from your final check, or if you have never used the catch-up provision of deferred compensation and wish to defer more than your age based limit noted above, please contact the Member Education Center.

A layoff separation is considered a termination of employment by the DCP and allows participants to withdraw their accounts once separated from employment. You are not required to remove your funds simply because you have separated. You may leave your contributions in the plan and continue your retirement savings in order to meet your goals for the future. Experts say most people will live on retirement benefits longer than they worked to earn them.

If you are planning on reinvesting your money, please be sure to compare the fees for the services you will receive. The DCP management and administrative fees are very low compared to the private sector.

If you must withdraw your DCP funds, you will need to consider the following:

  • You may elect to maintain your account, rollover all or a portion of your account to another qualified plan, or elect one of the plan’s payment options, which include full or partial lump sum withdrawal, periodic payments, and annuities.
  • DCP funds accrued through pre-tax contributions are taxable income as it is received, and the plan is required to withhold 20% for federal income tax. You may want to choose a method of payment that spreads your taxable account balance across tax years. If you made post-tax (Roth) DCP contributions, your withdrawal may not be taxable if it meets the criteria to be excluded from taxes.

Page Last Modified: 03/11/25 13:59:29