Voluntary Deferred Compensation Plans
A Deferred Compensation Plan permits an employee, on a voluntary basis, to authorize a portion of their salary to be withheld and invested for payment to them at a later date. These salary deferrals, or “contributions”, are allocated to the Plan’s investment choices with the plan participant's instruction.
No contributions nor investment earnings are subject to current federal and (in most cases) state income taxes. Taxes become payable when the deferred income plus earnings are distributed to you - generally at retirement, or separation from employment.
In today’s environment, it is widely accepted that in order to have a comfortable retirement, one must rely on income sources other than a pension or Social Security alone. The City’s voluntary deferred compensation plan is an important and valuable means for preparing for retirement and supplementing the TMRS plan.
Additional information regarding the City’s voluntary deferred compensation plans can be obtained from Human Resources.