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.
Learn more about the DCP in the Deferred Compensation Information Handbook and the Deferred Compensation Plan Document .
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:
- Empower 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 0.11% (0.11 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
| 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 | |||||
| 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.
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.
Learn more about the Roth 457 option from the IRS.
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.
Transfer requests made via the website or voice response system received on business days prior to close of the New York Stock Exchange (12 p.m. Alaska time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected.
Existing Investment Funds
The Plan provides for twenty-seven investment alternatives. 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.
- Passive US Bond Index Fund
- Stable Value Fund
- JPMorgan SmartSpending 2015 R6
- JPMorgan SmartSpending 2020 R6
- U.S. Small-Cap Trust Fund
- International Equity Fund
- World Equity Ex-US Index Fund
- Russell 3000 Index Fund
- S&P 500® Index Fund
- Alaska Target Retirement 2065 Trust
- Alaska Target Retirement 2060 Trust
- Alaska Target Retirement 2055 Trust
- Alaska Target Retirement 2050 Trust
- Alaska Target Retirement 2045 Trust
- Alaska Target Retirement 2040 Trust
- Alaska Target Retirement 2035 Trust
- Alaska Target Retirement 2030 Trust
- Alaska Target Retirement 2025 Trust
- Alaska Target Retirement 2020 Trust
- Alaska Target Retirement 2015 Trust
- Alaska Target Retirement 2010 Trust
- Alaska Long-Term Balanced Trust
- Alaska Balanced Trust
- State Street Treasury Money Market Fund – Inst.
Asset Allocation
- Strategic Completion Fund
Generally, the asset allocation of each target retirement trust will gradually become more conservative as the trust nears the target retirement date. The date in a target retirement trust’s name is the approximate date when investors plan to start withdrawing their money (generally assumed to be at age 65). The principal value of the trust(s) is not guaranteed at any time, including at the time of the target date and/or withdrawal.
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Caution: Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information, your registered representative can provide you with a mutual fund prospectus for the State Street Treasury Money Market Fund – Inst. and disclosure documents for the investment options exempt from SEC registration. Read them carefully before investing.
Your DCP offers access to three different levels of investment advisory tools and services called Reality Investing® Advisory Services. You can have Advised Assets Group, LLC (AAG), a wholly owned subsidiary of Empower Retirement and a federally registered investment adviser, manage your retirement account for you. Or if you prefer to manage your retirement account on your own, you can use online investment guidance and advice tools. These services provide a retirement strategy based on your investment goals, time horizon and tolerance for risk. There is no guarantee that participation in Reality Investing Advisory Services will result in a profit or that your account will outperform a self-managed portfolio.
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.
Any withdrawal must be authorized by the Plan Administrator.
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;
All hardship withdrawals are subject to the applicable requirements of the Internal Revenue Code and regulations.
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.
- through reimbursement or compensation by insurance or otherwise,
- by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
- 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 .
Please note that if your last day of work is in December, and your final pay will be paid to you in January of the following year, you will not be able to defer from your final check. Please contact the division for options on deferring to the plan through a leave cashin in advance of your final month of employment.
Caution: The signed memo must be received by the Division of Retirement and Benefits (DRB) in the month prior to your last day of employment. For example, if your last day of employment is anytime in the month of April, the memo for doing this must be received by DRB no later than March 31. This deadline is required by the plan document in order to comply with IRC regulations.
For employees not participating in the catch-up provision of deferred compensation, the maximum total deferral for (including regular deferrals from normal payroll, leave cash-ins, and final check) is either $30,000 (for participants aged 50 and over) or $22,500 (for participants under age 50). Employees participating in catch-up may be eligible to defer as much as $45,000 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.
Caution: Both enrollment in deferred compensation, as well as electing to participate in the catch-up provision require signed forms which must be received by the Division of Retirement and Benefits by the 25th of the month prior to your last day of employment or sooner. Due to processing time, please contact Empower or DRB two weeks prior to this deadline if you need to enroll in DCP or are considering participating in catch-up. (Deadlines may vary for employees paid on a biweekly schedule. Please email the for additional information.)
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.
