457(b) Plan

The information highlighted below is a summary of the 457(b) 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. 
  • OC SAN reduces your paycheck before income tax is withheld by that amount and forwards it to Voya Financial™ 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 at a later date. 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.

Eligibility

The Plan is a voluntary plan available to all regular full-time and part-time employees of OC SAN. Interns, independent contractors and leased employees are not eligible.

Contributions

Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here.

You may be eligible for increased contributions under one of two catch-up provisions: 

  • 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 OC SAN’s pension plan in which you are a member and receive immediate unreduced retirement benefits (or, if you are not a participant in a pension plan, not earlier than age 65). NRA cannot be later than age 73.

  • 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. You must select the provision which provides the higher contribution amount.

To learn more about this feature or to elect a catch-up provision, please contact your Voya Financial Professional at (949) 395-4365 or toll-free at (877) 266-9374.

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 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.

The IRS requires that distributions under a 457(b) plan begin no later than the April 1st of the calendar year following the calendar year in which you attain age 73 or separate from service, whichever occurs later. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not timely distributed. These rules are referred to as IRS Required Minimum Distribution requirements (RMD).

After you have severed employment and would like to select a benefit payment option, please call Service Center at (800) 584-6001.

Payment Options

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

Rollover into another Eligible Plan

  • Your distribution can be rolled over into a 401(a), 401(k), 403(b) or another government 457(b) plan or a traditional IRA. Amounts rolled from the 457 plan to another plan type (e.g., 401, 403(b), etc.,) would become subject to the IRS 10% premature distribution penalty tax if distributed prior to age 59 ½ (unless an IRS exception applies).

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 73; 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
  • 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

Divorce

In the case of divorce, the court may issue a Domestic Relations Order providing that your account is to be split and payment made to an alternate payee. If this happens, Voya will review your domestic relations order to determine whether it satisfies the Plan and IRS requirements for a qualified domestic relations order (QDRO). The alternate payee 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 and an instruction package, 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 accessing your account online (Log In). 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 in accordance with the terms of the Plan.

 

Taxation

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 payment is made to you.
  • 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 IRS 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(b) plan, such rollover amounts will be subject to this IRS 10% premature distribution penalty tax if distributed prior to attaining age 59½, unless an IRS exception applies. IRS exceptions include payments made:

  • Upon your severance from employment/retirement on or after you attain age 55;
  • In substantially equal amounts over your life/life expectancy;
  • As a result of your total and permanent disability; 
  • To your former spouse as an alternate payee under a qualified domestic relations order; or
  • To your beneficiary as a result of your death.

Voya 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 (or a beneficiary account holder) resulting from:

  • An illness or accident involving you, your spouse, your dependent (as defined by the IRS), or your primary beneficiary designated under the Plan;
  • The loss of your 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 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 your 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 your spouse, dependent (as defined by the IRS) or your primary beneficiary designated under the Plan.

Only the amount reasonably necessary to meet the emergency need is available for withdrawal.

Loans

Loans are available according to the following guidelines:

  • An active participant is permitted to have two general purpose loans and one residential loan (used to acquire, construct, reconstruct or substantially rehabilitate the principal residence of the participant or family member) outstanding under the Plan at any time. 
  • Minimum loan amount is $1,000.
  • The maximum loan amount for the aggregate of all loans under the Plan is the lesser of: 1) $50,000 minus the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is taken, over the outstanding balance of loans on the date the loan is taken; or 2) 50% of your vested account balance. 
  • Loan repayments (principal and interest) are made by the participant to Voya on a monthly basis. 
  • The maximum loan repayment period is five (5) years for general purpose loans and twenty (20) years for residential loans. 
  • A one-time set up fee of $100 applies to each loan taken. 
  • In the event of a loan default, the participant is not permitted to initiate another loan of that type until the defaulted loan is repaid.

To request a loan, please call Customer Service at (800) 584-6001. Loans may impact your withdrawal value and limit participation in future growth potential.

 

You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options, carefully before investing. The fund prospectuses and information booklet containing this and other information can be obtained by contacting your local Financial Professional​. Please read the information carefully before investing.

Group annuities are intended as long-term investments designed for retirement purposes. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.