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FAQs
New York City Deferred Compensation Plan (DCP)

General
How does an eligible New York City employee enroll in DCP?
What are the differences between the Plans?
What information does an employee need to have available before he/she enrolls online?

Personal Identification Number (PIN)
Why does a participant need a PIN?
Can a participant change his PIN?
How long does it take to receive a PIN?
Why must PINs be mailed?
What if a participant does not know his/her PIN?

Contributing to the Plan
How much can a participant contribute to the Plan?
How soon after enrolling do payroll deductions begin?
Can a participant in the 457 Plan make up for past years when he or she didn’t contribute the maximum allowable amount?
How will tax-deferred savings affect Social Security benefits for employees who are paying FICA tax?

Making Changes
How can a participant change his or her deferral percentage?
How does a participant change his/her address with the Plan?
Can a participant change his/her beneficiary election?
Does a participant need to notify the Plan if he/she changes agencies?
Can a participant stop or change distributions?

Investment Options
What is the past performance of each of the investment options?
When does a transfer of investment funds become effective?
Are there any restrictions when making account transfers?
How are investment managers selected?

Account Statements
When are statements issued?
What delivery methods are available?
How can a Participant obtain a copy of his/her last quarter's statement?

Withdrawals and Distributions
Can a participant leave money in the Plan after severance from City service.
Can a participant consolidate his assets by rolling over funds from other plans into the Deferred Compensation Plan?
Is it better to take a lump sum or periodic payments?
How soon after termination of employment can distributions commence?
Are there any penalties for early withdrawals from the the 457 Plan?
How much tax will be withheld from a participant’s distribution check?
Can a participant take out a loan from his/her Deferred Compensation Plan account?
Can a participant use his Deferred Compensation Plan assets to buy-back pension service credit?
Is the $20,000 annual exemption from NYS and NYC taxes on withdrawals after age 59 1/2 applied to Plan distributions.

Voice Response System
What can one do through the voice response system?
What is the telephone number for the voice response system?




How does an eligible New York City employee enroll in the Deferred Compensation Plan?
Enrolling in the Deferred Compensation Plan is easy. Employees can enroll:

1. Online, or
2. By completing a 457/401(k) Plan Enrollment Form.

Learn more about online enrollment

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What information does an employee need to have available before he/she enrolls online?
Before enrolling in either the 457 Plan or the 401(k) Plan, or both, employees should read the Summary Guide of 457 & 401(k) Plan Provisions. When enrolling, the employee will be asked to elect a deferral percentage (the amount of money to be contributed to the Plan through payroll deductions), to select an investment allocation, and to make a beneficiary election. 

Learn more about online enrollment

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What are the differences between the 457 Plan and the 401(k) Plan?
Please review the Plan Comparison chart (PDF) to obtain details about the differences between the 457 and 401(k) plans.

View the Plan Comparison Chart (PDF)

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Why does a participant need a PIN?
For security reasons, PINS are required in order to enroll electronically and for account access.

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Can a participant change his PIN?
Yes. Participants can change their PIN at anytime online or through KeyTalk at (212) 306-7760.

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How long does it take to receive a Personal Identification Number (PIN)?
PINS are sent via regular mail and employees should allow 5 - 7 business days to receive the PIN.

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Why must PINS be mailed?
PINS are confidential numbers which are system generated and the Plan's staff does not have access to these numbers.

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What if a participant does not know his/her PIN?
A participant can request a Reminder PIN which will be mailed to the address on file with the Plan.

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How much can a participant contribute to the Plan?
A participant can defer anywhere from 1% to 75% of his/her gross compensation in multiples of 0.5%. The contribution amount is calculated after any deductions for pension contributions.

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How soon after an employee enrolls do his or her payroll deductions begin?
Generally, payroll deductions will begin in the month following enrollment.  Depending on payroll processing dates, deductions may take anywhere from 30 to 45 days to go into effect.  A letter confirming enrollment will be sent to the employee.

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Can a participant in the 457 Plan make up for past years when he or she didn’t contribute the maximum allowable amount?
Yes, but only under certain circumstances. Participants who have not contributed the maximum amount to the 457 Plan in previous years have an opportunity to make up for underutilized contributions prior to retirement through the Deferral Acceleration for Retirement (DAR) program.

For more information, please see: Deferral Acceleration for Retirement.

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How will tax-deferred savings affect Social Security benefits for employees who are paying FICA tax?
Contributions to the Deferred Compensation Plan will not affect either Social Security contributions or benefits. This is because FICA tax is based on the gross earnings before Deferred Compensation deductions are taken.

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How can a participant change his or her deferral percentage?
A participant can increase or decrease his/her deferral percentage at any time by accessing his/her account either online or through the Plan's voice response system at (212) 306-7760. Changes are effective within 30 days.


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How does a participant change his/her address with the Plan?
A participant can update his/her address online by accessing their account and selecting "Change Your...Personal Profile."  A participant can also complete a Change Form indicating the new address and submit the form to the Plan's Administrative Office. Once the requested address change has been processed, a confirmation letter will be mailed to the participant. Changes are effective within 30 days.  Participants should also change their beneficiary's address, if applicable.

 

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Can a participant change his/her beneficiary election?
Yes. A participant can change his/her beneficiary election by accessing his/her account online or by submitting a completed Change Form, listing all of his/her beneficiaries on the form, to the Plan's Administrative Office. Once the requested beneficiary change has been processed a confirmation letter will be mailed to the participant.  If an employee participates in both the 457 Plan and the 401(k) Plan, changing beneficiaries in one Plan will not effect the other Plan. The participant must complete two Change Forms indicating beneficiary changes in each Plan.
 

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Does a participant need to notify the Plan if he/she changes agencies?
Yes. A participant must complete a Change Form indicating the new agency and submit the form to the Plan's Administrative Office. Once the requested agency change has been processed a confirmation letter will be mailed to the participant. Changes are effective within 30 days.

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Can a participant stop or change distributions?
Yes, a participant can stop or change his/her distribution request at any time. A participant must complete a new Distribution Form, indicating the change requested, and submit it to the Plan's Administrative Office. Distribution requests are processed within 30 days.

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What is the past performance of each of the investment options?
View past performance of the Plan's investment options.
 

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When does a transfer of investment funds become effective?
Account transfers initiated prior to 4:00 p.m. Eastern Time on a business day will be effective that same day and reflected in the account the following business day.  Transfer requests initiated after 4:00 p.m. Eastern Time will be effective the next business day and reflected in the account two business days later.
 

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Are there any restrictions when making account transfers?
No.  However, effective March 13, 2009, transfers out of any Plan investment option will be assessed a 2% redemption fee on the amounts transferred into that option within the previous thirty-two (32) calendar days. Any amounts held longer than thirty-two days (32) consecutive calendar days will not be assessed the redemption fee. This is meant to strongly discourage frequent trading in the Plan.  The fees collected will be re-invested back into the option in order to offset the decrease in fund value associated with the trades.

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When are statements issued?
The Plan issues quarterly statements two weeks after the close of each calendar quarter.

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What delivery methods are available?
Participants automatically receive statements by regular mail or request to receive his/her statement electronically by signing up for Online File Cabinet (OFC).
 

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How can a Participant obtain a copy of his/her last quarter's statement?
Participants can request a copy of his/her last quarter's statement or an interim statement (quarter to date) online or through KeyTalk by calling (212) 306-7760.
 

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Can a participant leave money in the Plan after severance from City service.
Yes. A participant is only required to begin taking distributions from his/her 457 or 401(k) account by his/her "required beginning date." The "required beginning date" is April 1 of the calendar year following the later of: (1) the calendar year in which the participant reaches age 70 1/2; or (2) the calendar year in which the participant separates from City service. 

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Can a participant consolidate his assets by rolling over funds from other plans into the Deferred Compensation Plan?
Yes. Participants are able to consolidate assets from other 401(k) plans, 403(b) plans, 401(a) plans, 457 plans and IRAs into the City’s 401(k) Plan. The 457 Plan can accept rollovers of before-tax contributions and earnings from other 457 plans only.
 

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Is it better to take a lump sum or periodic payments?
A participant can gain an added advantage during distribution by electing to withdraw funds in periodic payments. Only the portion of the account which is distributed will be subject to taxation and the balance in the account will continue to accumulate tax-deferred.
 

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How soon after termination of employment can distributions commence?
Distributions cannot begin prior to the 45th day after severance from City service. In addition, the Plan requires a minimum of 30 days' notice for processing distributions.
 

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Are there any penalties for early withdrawals from the the 457 Plan?
No. Withdrawals from the 457 Plan are NOT subject to early withdrawal penalties (penalties before age 59 1/2). Participants can withdraw funds any time after severance from City service.

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How much tax will be withheld from a participant’s distribution check from a pre-tax account?
Post-service distributions are subject to a 20% mandatory federal tax withholding and will be reported on Form 1099-R in the year when paid.  

New York State Residents:  Distributions from the Plan that are periodic payments lasting for a period of 10 years or more, or periodic payments based on life expectancy, are subject to New York State required withholding.  New York State residents can adjust their tax withholding by submitting a New York State Form IT-2104 with their DCP distribution form.  For all other states, the amount of state income tax that will be withheld will depend upon your state of residence.

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How much tax will be withheld from a participant’s distribution check from a Roth (after-tax) account?
Qualified Distributions from a participant's Roth account are never subject to federal, state or local income tax withholding.   

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Can a participant take out a loan from his/her Deferred Compensation Plan account?
Yes, the Plan permits loans from a participant's pre-tax 457 and pre-tax 401(k) account. Please see the Loan Guide for the 457 & 401(k) Plan for details.
 

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Can a participant use his Deferred Compensation Plan assets to buy-back pension service credit?
Yes. Only 457 Plan assets are eligible to be used for this purpose. 

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Is the $20,000 annual exemption from NYS and NYC taxes on withdrawals after age 59 1/2 applied to Plan distributions.
Yes. 

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What can one do through the voice response system?
Through the Plan's voice response system, participants can access KeyTalk to obtain account information, change their deferral percentage, make investment changes and request their most current account statement. 

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What is the telephone number for the voice response system?
The number is (212) 306-7760. Callers located outside of NYC can use the toll-free number which is 888-DCP-3113 (888-327-3113). 

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Spotlight

Employee Assistance Programs (EAPs)
EAPs are staffed by professional counselors who can help employees and their eligible dependents handle problems in areas such as stress, alcoholism, drug abuse, mental health, and family difficulties.

 Learn More
Quick Links

 PICA Program
 NYC Employee Blood Program
 Collective Bargaining Agreements
 OPA Web site
 NYC.gov