To increase your retirement benefits, you can save extra money in addition to the Mandatory Contributions you make to your employer's Qualified 401(a) Retirement Plan. You may contribute on an after-tax basis up to one hundred percent (100%) of your compensation (after normal deductions) through an After-Tax Voluntary Contribution to this plan, subject to the annual total 401(a) contribution limit, reduced by the total contributions made through your employer's qualified plan, see Current Plan Limits. Taxes are paid on these monies before they are contributed, so no taxes are due on these contributions upon receipt of the account. However, the investment return earned on these contributions will be taxable when the account is distributed, only on the amount of earnings withdrawn.
These contributions may be made through payroll deduction, if your employer is set up to process them. Alternatively, you may make a Voluntary Contribution by remitting a personal check, money order or cashier's check through CCOERA, with the applicable form, not to exceed the compensation you have received year-to-date. Contact CCOERA Client Services to help you determine your options in this area and how to process your particular voluntary contribution request.
Another means of accumulating additional money for retirement is the CCOERA 457 Deferred Compensation Plan. Contributions made to the Deferred Compensation Plan are made on a pre-tax basis instead of an after-tax basis which is the case for Voluntary Contributions to the 401(a) Retirement Plan. This tax strategy allows you to invest some of the money that you would have paid in federal and state income taxes. Deferred Compensation contributions may only be made through payroll deduction. For complete information about the CCOERA Deferred Compensation Plan, please refer to CCOERAs Deferred Compensation Plan.