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Frequently Asked Questions

 

 

What is the main difference between a 401(k) and a 457?What is the main difference between a 401(k) and a 457?<p>​While there are several differences, the primary difference has to do with when the assets are eligible for a distribution. A 401(k) is based on age while the 457 is based on your status with the State. In a 401(k), you can take money out without a penalty once you reach 59 1/2, regardless of your employment status. In a 457, you can take money out once you are separated from the state, regardless of age and there is no penalty.</p>
What are the tax benefits: Pre-tax vs. Roth?What are the tax benefits: Pre-tax vs. Roth?<p>​There are two ways you can contribute to Savings Plus, pre-tax and after-tax (also called Roth). Pre-tax means your contributions are deducted from your gross pay before taxes are determined. The result, you reduce your taxable income. With a Roth after-tax contribution, you do not get a tax benefit when you contribute, however qualifying withdrawals are paid out tax free. This means your investments grow tax free. We recommend you speak to a tax advisor to determine the strategy that is best for you.</p>
What is the benefit of lump sum and catch-up?What is the benefit of lump sum and catch-up?<p>​Transferring your unused accumulated leave credits (Lump Sum Pay) into your Savings Plus account(s) allows you to defer taxes on the lump sum payment and make one final contribution towards your retirement.</p><p>You can play “catch-up” to make up for previous years you didn’t contribute the maximum amount allowed to your 457 plan. You can use your lump separation pay at retirement with the catch-up option to maximize your deferrals into your 457 plan account.</p>
What kinds of educational support does Savings Plus offer?What kinds of educational support does Savings Plus offer?<p>​Savings Plus offers a comprehensive list of educational workshops and webinars to help you understand your 401(k) and 457 retirement plan benefits. To schedule any of the workshops and webinars at your location, email <a href="mailto:SPPTraining@calhr.ca.gov">SPPTraining@calhr.ca.gov</a>.</p><p>View upcoming dates and times for <a href="/state-hr-professionals/Pages/ereg.aspx?of=Savings%20Plus%20Program">Savings Plus Workshops</a>.</p><p>View upcoming dates and times for <a href="https://www150.livemeeting.com/lrs/8003674589/Registration.aspx?pageName=897qnhtl825jcljj">Savings Plus Webinars</a>. </p><p>Additionally, you can order Onboarding/Enrollment kits, forms and publications using our Resource Guide. Request the form at <a href="mailto:SPPTraining@calhr.ca.gov">SPPTraining@calhr.ca.gov</a>.</p><p> </p>
Is there a search option on savingsplusnow.com?Is there a search option on savingsplusnow.com?<p>​You can search for specific information on <a href="http://www.savingsplusnow.com/about/spp.html">savingsplusnow.com</a> via the search option located in the top right hand corner of every page.</p>
How does a Savings Plus account become underfunded?How does a Savings Plus account become underfunded?<p>​A Savings Plus 401(k), 457, Part-time, Seasonal, and Temporary Employees Retirement Program (PST) or Alternate Retirement Program (ARP) account is considered underfunded when either an employee directed deferral or appropriate PST or ARP contribution does not post to an employee’s account on time. The entity that made the error will be responsible for covering corrective contributions and/or lost earnings to make the employee’s account whole. If the error occurred on or after October 1, 2012, the entity responsible will also incur a $500 fee to pay for administrative costs associated with correcting the accounts. Refer to California Code of Regulations §599.944, §599.945.4, §599.946 and §599.947 and PML 2011-042 and 2012-012 for types of accounting errors and delays that can cause an employee’s account to be underfunded.</p>

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