As part of the most recent announcement of additional expenditure restrictions necessary to balance the state budget, the State of Missouri, Division of Budget and Planning announced yesterday that the employer incentive (match) associated with the State of Missouri Deferred Compensation Plan (the Plan) will be suspended at least through June 30, 2010. This will impact state contributions to the Plan for all participants beginning with the March 31, 2010 paycheck.
It is unknown at this time if the match will remain in the FY2011 budget, beginning July 1, 2010, as was initially recommended by the governor. That budget is currently making its way though the legislative process and will not be finally determined until May of this year. In addition, state economic conditions may affect the state’s ability to restart the incentive payment. More information will be posted on the Plan website as it becomes available.
Remember, it is just the employer match that is being eliminated and this change will have no effect on your current contributions to the 457 plan or your paycheck. The Plan is and will continue to be an important savings option available to you as an eligible state of Missouri employee.* Your contributions will continue to accumulate through tax-deferred compounding throughout your career.
Personal savings remains an important part of the “three-legged stool” concept of retirement planning. Personal savings, combined with social security and your defined benefit pension, will help provide you with a more comfortable retirement. Even without the employer match, remember that by participating in the State of Missouri Deferred Compensation Plan, you have access to the following benefits:
- Lower income taxes—each dollar you contribute lowers your taxable income by a dollar.
- Easy contributions through payroll deduction.
- Tax-deferred growth—No taxes are due on investment earnings until you withdraw the money.
- Low fee investment options and access to a brokerage window using your tax deferred contributions.
- Missouri Target Date funds offer a professionally-managed investment option that automatically changes as you age and offers built-in diversification to help reduce the impact of market volatility.
- All of the fund information and financial tools on www.modeferredcomp.org, including the My Retirement Outlook calculator.
- Plan consultants who are available to answer your questions and help you understand Plan benefits.
We know that this information comes during difficult economic times. If you aren’t enrolled, it is easy to start your contributions at any time by following these step by step instructions. If you have questions or concerns please contact the Plan at 800.392.0925.
*Standard maintenance fees apply for accounts with a balance.