City of Portland Government 457(b) Plan
The information highlighted below is a summary of the 457 Plan. In the event of a conflict between the information contained within this website and the Plan document, the Plan document controls.
The Plan is established under Internal Revenue Code Section 457(b). Under the Plan, you postpone receiving (defer) a portion of your salary. It works like this:
- You decide, within certain legal limits, how much of your income you want to defer.
- The City reduces your paycheck before income tax is withheld by that amount and forwards it to Voya on a regular basis.
- Contributions are invested in the investment options you have selected.
- The contributions and any earnings that accumulate are not taxed until they are distributed to you. This is usually at retirement when you may be in a lower tax bracket.
- Amounts are held for the exclusive benefit of Plan participants and beneficiaries.
The 457 Plan is a voluntary plan available to all full-time and part-time employees who are eligible for benefits offered by the City, and elected officials of the City. Independent contractors and leased employees are not eligible. Employees are eligible to enroll on the first day of the month following the month in which they complete 30 days in a paid status.
Contributions under the Plan are made by participants through a reduction in salary. You must elect to defer a minimum of $10 per pay day.
You may be eligible for increased contributions:
- During the three consecutive years prior to attaining Normal Retirement Age under a special section 457(b) catch-up provision.
For purposes of the special section 457(b) catch-up provision, the Normal Retirement Age (NRA) cannot be earlier than the earliest age you are eligible to retire under the City’s pension plan in which you are a member and receive immediate unreduced retirement benefit (or, if you are not a participant in a City pension plan, not earlier than age 65). NRA cannot be later than age 70½, unless you are employed beyond that time.
Normal Retirement Age differs depending on the City pension plan in which you participate:
- Fire and Police Disability and Retirement Fund
- Age 50 and 25 or more years of service, OR
- Age 55 with no service requirement
- Public Employee’s Retirement System (PERS)
- Tier 1: General Service – Age 58 with no service requirement OR 30 years of service with no age requirement (Fire and Police have same NRA as under Fire and Police Plan)
- Tier 2: General Service – Age 60 with no service requirement OR 30 years of service with no age requirement (Fire and Police have same NRA as under Fire and Police Plan)
- Oregon Public Service Retirement Plan (OPSRP)
- OPSRP General Service - Age 65, or age 58 with 30 years of service
- OPSRP Police and Fire - Age 60, or age 53 with 25 years of service
- On and after you attain age 50 under an age 50+ catch-up provision.
Note that you may not use the age 50+ provision and the special 457(b) catch-up provision during the same calendar year.
View additional information on the 457(b) special catch-up provision or the increased contribution limits for participants age 50 and older.
You must elect catch-up by completing the City’s catch-up application. To elect the special section 457(b) catch-up provision, please contact your local representative or our Portland office at (503) 937-0378 or toll-free at (800) 238-6281.
Timing of Distributions
Distributions are allowed only upon severance from employment, death, or the occurrence of an approved unforeseeable emergency, which are considered to be triggering events. The 457 Plan also includes a provision allowing the in-service distribution of accounts that do not exceed $5,000 if: 1) you have not made any contributions to the Plan during the prior two years; and 2) you have not received this type of in-service distribution in the past.
If you are age 72 and are retired, the law mandates that you begin to take a required minimum distribution (RMD) from your Plan account. The RMD is calculated using your account balance as of the last day of the previous year.
1. If you turn age 72, you have until April 1st in the following calendar year to take your RMD for the current tax year. If you wait until January 1st, you will need to take another RMD by December 31st of that year and will be taxed on both in that year.
2. If you are age 72 and still employed, you are not required to begin taking your RMD.
If you are retired and do not take the RMD in a given year, you will have a penalty of 50% of the amount that should have been distributed.
After you have severed employment and would like to select a benefit payment option, please call Service Center at (800) 584-6001 to request a distribution and for the Termination/Distribution Request Authorization form that you will need to complete.
When you are entitled to a distribution of benefits under the Plan, you can choose from any (or a combination) of the payment options described below:
- Periodic payments of your account over a specified period or for a specified amount
- Lump sum, or partial lump sum distribution
- Take all or a portion of your account balance in cash.
- Annuity Options
- Choose from a variety of annuity options including a joint and survivor annuity, life annuity and life annuity with period certain.
- Rollover into Another Eligible Plan
- Your distribution can be rolled over into an 401(a), 401(k), 403(b) or another government 457 plan or a traditional IRA, if the plan permits rollovers.
- All distributions are eligible for rollover except for: 1) amounts distributed for an unforeseeable emergency withdrawal; 2) IRS required minimum distributions payable on or after you attain age 72; and 3) periodic payments made over your life or a specified period of 10 years or more.
- Postpone any decision on benefit payments until a later date.
Please note that under the Plan, distribution of your account can begin no earlier than 31 days following your severance from employment.
If in the course of your divorce, the court issues a Domestic Relations Order, your account may be split and payments may be made, as specified in the order. Before this can occur, Voya will review your domestic relations order to determine whether it satisfies the Plan and IRS requirements for a qualified domestic relations order (QDRO). In the event the alternate payee is your former spouse, he or she is entitled to elect immediate distribution of the amounts awarded under the QDRO. A spousal alternate payee is also eligible to rollover amounts awarded to another eligible retirement plan in which he or she participates.
To obtain additional information, please contact Service Center at (800) 584-6001.
Beneficiary Designation and Death Benefits
You are permitted to designate a person or persons to receive payment of benefits in the event of your death. You designate a beneficiary (or make changes to your previous designation) by completing a Beneficiary Designation Form. The completed form must be returned to the City.
Upon your death, benefits would be payable to the beneficiary(ies) that you designated under the Plan. If you have not designated a beneficiary payment of death benefits will be made to your estate.
Your beneficiary will be entitled to select from a variety of payment options, which are generally the same options that would have been available to you. Your beneficiary will need to call the Portland Office for validation of beneficiary and appropriate paperwork.
To verify your beneficiary on file, please contact the City Bureau of Financial Services, or call our Portland Office at (503) 937-0378 or toll-free at (800) 238-6281.
All of the payments you receive from the Plan are subject to federal and state income taxes.
Federal income tax withholding will apply to your payments, as described below, based on whether you are eligible to rollover the distribution.
- If you receive a distribution that is eligible to be rolled over, a mandatory 20% will be withheld for federal tax purposes at the time of payment.
- If you receive a distribution that is not eligible to be rolled over, 10% federal tax will be withheld at the time of payment. However, you may elect to have no withholding withheld.
- Amounts distributed from a 457(b) plan are not subject to the 10% premature distribution penalty tax if distributed prior to attaining age 59½. However, if you have previously rolled over amounts from a plan (including a traditional IRA) other than a government 457 plan, such rollover amounts will be subject to this 10% premature distribution penalty tax if distributed prior to attaining age 59½, unless an IRS exception applies.
Voya Financial® does not offer legal or tax advice. Please seek the advice of your own legal or tax advisor prior to making a tax-related investment decision.
Unforeseeable Emergency Withdrawals
IRS guidelines and the Plan document provide that an unforeseeable emergency means a severe financial hardship to the participant resulting from:
- An illness or accident involving you, your beneficiary, the spouse of you or your beneficiary or a dependent (as defined by the IRS) of you or your beneficiary;
- The loss of your or your beneficiary’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 result of a natural disaster); or
- Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your or your beneficiary’s control.
Withdrawals are permitted only to the extent the hardship cannot be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidating your assets (to the extent this would not itself cause severe financial hardship); or 3) by stopping deferrals under the Plan.
Situations that may constitute unforeseeable circumstances include:
- The imminent foreclosure of or eviction from the participant’s or beneficiary’s primary residence.
- The need to pay for medical expenses, including non-refundable deductibles, as well as the cost of prescription drug medication.
- The need to pay for the funeral expenses of a spouse or dependent (as defined by the IRS).
Only the amount reasonably necessary to meet the emergency need (which may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution) is available for withdrawal.
Upon approval of your request for an unforeseeable emergency withdrawal, your contributions under the 457 Plan will be suspended for a period of 6 months following such withdrawal.
When you believe that you have incurred an unforeseeable emergency under the Plan, you must complete an Unforeseen Emergency Application. You can obtain a form by calling the Customer Service line at (800) 584-6001. For further assistance, call Christina Pham, Deferred Compensation Administrator, at (503) 823-6140. Voya will review your completed package, including appropriate documentation, and make a determination as to whether your request meets the IRS and Plan guidelines. If your request is denied, you may appeal the decision to the City of Portland Deferred Compensation Committee. Your appeal must be in writing and received by the Deferred Compensation Administrator within 30 days of the date of denial. The committee shall issue a written decision within 90 days of receipt of the appeal by the Deferred Compensation Administrator. Any decision of the Committee is final.
Requests for appeal should be sent to:
Christina Pham, Deferred Compensation Administrator
City of Portland – Human Resources
1120SW 5th Avenue, Room 404
Portland, OR 97204
Phone: (503) 823-6140
Fax: (503) 823-3522
Loans are not available under the Plan.
Once enrolled, you can choose from a menu of investment options that cover the risk/reward spectrum allowing you to select from conservative choices, moderate growth and income funds, or aggressive growth opportunities in both U.S. and international markets. International investing involves special risks such as currency fluctuation, lower liquidity, political and economic uncertainties, and differences in accounting standards.
For each investment option in Investment Options, click on the fund name to open a fund fact sheet that provides important information about the investment option, including fund expenses. Each investment option has a numeric fund code you will need when making investment changes on-line or via telephone.
While reviewing the fund fact sheets below, please also review the Disclosure Glossary document that provides information on types of investment risks, investment types and a glossary of terms and statistics. The document also provides instructions about how to obtain any underlying fund prospectus.
Not FDIC/NCUA/NCUSIF Insured | Not a Deposit of a Bank/Credit Union | May Lose Value | Not Bank/Credit Union Guaranteed | Not Insured by Any Federal Government Agency
Insurance products issued by Voya Retirement Insurance and Annuity Company, One Orange Way, Windsor, CT 06095-4774. Securities are distributed by Voya Financial Partners, LLC (member SIPC). Custodial account agreements or trust agreements are provided by Voya Institutional Trust Company. Insurance obligations are the responsibility of each individual company. All companies are members of the Voya® family of companies. Securities may also be through other broker-dealers with which Voya has selling agreements. Product and services may not be available in all states.