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Employee Contributions

roth and pretax payroll deductions being put into a 457 accountWhen you participate in RIC, you choose how much to contribute to a 457 employee contribution account through automatic payroll deductions (see contribution limits). You may choose to have deductions taken from your paycheck before state and federal income taxes (pretax) or after taxes have been withheld (post-tax Roth). There are no vesting requirements.

If you wish to begin or change your payroll deduction elections, log into Workday and choose the Benefit Plan option that includes:

  • The name of your provider
  • How you want your deductions taxed (pretax or Roth)
  • Your preferred payroll deduction frequency (1st paycheck monthly, 2nd paycheck monthly, 1st and 2nd paychecks monthly or all payrolls)

You will then select the contribution type of either dollar amount or percentage (of gross pay), then enter the desired dollar amount or percentage.

Contribution Limits

There is no minimum contribution amount required to participate in the 457. The 457 plan maximum contribution limits (combined pretax and Roth contributions) are declared by the IRS annually (see IRS annual contribution limits).

 

Final paycheck

When you leave State employment, you have the option to defer final wages, unused sick pay (up to $2,000), and unused vacation pay from your final paycheck (up to the IRS maximum limit). You have the option to contribute pretax, post-tax, or both. If the amount you wish to defer will cause you to go over the Age 50+ limit, you may possibly qualify for the 3-Year Catch-Up limit.

 wages plus unsed vacation plus $2,000 unused sick pay = Final Paycheck

To change the amount of your deduction for your final paycheck, complete the Special Deduction Request form with the exact dollar amount you wish to deduct and submit it as instructed on the form by your last day of employment. This is also the process to request a change to taxation of your deductions (pretax and Roth).

 

Deduction frequency

You may choose to have your payroll deductions taken:

  • 1 paycheck per month (1st paycheck of each month or 2nd paycheck of each month)
  • 1st and 2nd paychecks each month
  • All paychecks in a year (26 times/year includes 3rd paycheck of a month)
  • From final paycheck only - retiring employees have the option to defer unused sick pay (up to $2,000) and unused vacation pay from their last paycheck by completing the Special Deduction Request form.

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Deduction Changes

You may change (or stop) deductions at anytime. If you choose to discontinue contributions, your match contributions will also be discontinued. If you wish to change your payroll deduction elections, log into Workday and choose the Benefit Plan option that includes the:

  • Name of your provider
  • How you want your deductions taxed (pretax or Roth)
  • Preferred payroll deduction frequency (1st paycheck monthly, 2nd paycheck monthly, 1st and 2nd paychecks monthly or all payrolls)

You will then select the contribution type of either dollar amount or percentage (of gross pay) and enter the dollar amount or %.

Changes to your final paycheck deduction must be submitted to RIC on the Special Deduction Request form no later than your last day of employment.

 

Processing Timeline

When you elect to change your payroll deduction amount, RIC processes the change to be effective with the 1st available paycheck of the month following the receipt of your request.

Changes to your final paycheck deduction must be submitted to RIC on the Special Deduction Request form no later than your last day of employment.

 

IRS Maximum Limit Changes

The IRS declares the annual maximum contribution limits each calendar year. If the IRS declares to increase the maximum limit in a year, the increase will be in $500 increments.

 

 

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State of Iowa Employees

IRS annual contribution limits
Deduction frequency
Final paycheck 

Roth Summary
Deduction changes
3-Year Catch-up provision
Employer match benefit



 


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