Deferred Compensation 457(b) Plan
The City of Madison offers an optional Deferred Compensation 457(b) Plan to permanent employees. The City does not make matching contributions toward the 457(b) Plan. Because there is no defined enrollment period, eligible employees may enroll in the 457(b) Plan at any time during employment with the City. The standard minimum contribution is $25.
Wisconsin Retirement System (WRS) annuities generally replace only a portion of your wages, so many employees use a Deferred Compensation Plan to fill in the income gap. 457(b) Plans are primarily set up for public employees to replace private sector 401(k) Plans.
Both Traditional and Roth 457 options are available to City employees:
- Traditional 457 Plan contributions are deducted from your pay before taxes are collected. With a Traditional 457, contributions and earnings are taxed upon distribution from the account.
- Roth 457 Plan contributions are deducted from your pay after taxes are collected. With a Roth 457, contributions and earnings are not taxed upon distribution from the account.
If you are unsure whether a Traditional or Roth account would better suit your individual needs, we recommend you connect with a representative for your intended plan administrator for more information.
Please note: Withdrawals can only be made from your 457(b) account after separation from employment with the City of Madison, except in narrowly defined emergency situations (please see information below on emergency withdrawals).
Plan Administrators
Employees have the opportunity to participate in the 457(b) Plan with two separate plan administrators: MissionSquare and Fidelity. Both plan administrators offer a variety of investment options for employees.
To begin contributing to a 457(b) account, visit the MissionSquare or Fidelity pages to find the appropriate plan enrollment information. The pages also include details about scheduling an appointment with a plan representative to discuss enrollment/investment options.