Deferred Compensation Plan

381 Deferred Compensation Plan

Effective Date:

Revision Date:

Sni Valley has established a deferred compensation plan to provide employees the potential for future financial security for retirement.

Regular full-time employees may participate in the deferred compensation plan subject to all terms and conditions of the plan.

Under section 457 of the Internal Revenue Code, employees of state or local governments, their agencies and tax-exempt employers can set aside money for retirement on a pre-tax basis through a plan sponsored by their employer. To encourage saving for retirement through these plans, the federal government created special tax advantages for 457 contributions.

Under this voluntary plan, you decide the amount of money you want to contribute to the plan during each pay period, up to a predetermined maximum (the IRS sets the limit on contribution each year). The amount you contribute is deducted from your pay before federal income taxes are taken out. Your 457 money is forwarded to your plan provider monthly. The plan provider then invests it in one or more of the investment options you selected under the annuity contract-from variable funds to fixed interest accounts. Representatives of the plan provider can help you with your financial planning.

You can access account information 24 hours a day via the internet or a toll free telephone number. You can transfer money between your investments anytime. Some restrictions on transfers apply to money invested in fixed interest accounts. You can stop your salary deduction at any time, restoring your compensation to its former level. You don't owe income taxes on your contributions, or any money they earn, until the money is distributed from the plan, usually at retirement or separation from employment, extreme financial hardship, or at death to the named beneficiaries. Your account may be transferable at separation if your new employer maintains a 457 deferred compensation plan.

Contact the Fire Chief for more information regarding the deferred compensation plan.

Policy No.  381  Issued  6/29/2000  Applicable  9/19/2005