The Deferred Compensation Plan

Why Join DCP?

A Needed Income Source in Retirement - And More

If you are a member of a pension system and expect to collect social security during retirement, you may be wondering whether joining DCP will benefit you. While pension and social security provide two-thirds of a sound foundation for retirement, these two income sources alone may not be enough to live comfortably and cover expenses adequately.

Experts say an individual will need as many sources of income as possible for retirement. NYC DCP is an excellent choice as a third stream of income to supplement pension and social security throughout retirement

Depending on the age in which you retire, you may not be eligible to collect Social Security yet. During this time between retirement and when Social Security payments begin, it is possible you may not have enough to cover your expenses. Additionally, your Social Security benefit increases the longer you delay payment. This is where the NYC Deferred Compensation Plan comes in.

The money saved in the NYC Deferred Compensation Plan can be used as a bridge to cover necessary expenses in that period of time before you decide to collect Social Security. Even if you do retire at a normal retirement age and are eligible to collect social security, Pre-tax contributions are tax deferred – lowering your taxable income today.

If you join the Plan on a Roth (after-tax) basis, taxes are paid at the time your contributions are made and the earnings on those contributions are income tax-free.

NYC DCP is an excellent way to supplement your retirement income, whether you're:

  • an employee who is a member of a City pension plan using DCP as supplemental savings to your pension and Social Security, or
  • a non-pension member employee using DCP as your sole retirement plan in lieu of Social Security (if elected), or
  • a non-pension member employee who is contributing less than 7.5% to either the 457 Plan or the 401(k) Plan.

Plus, DCP is easy!

  • Contribute regularly through automatic payroll deductions.
  • Save on taxes now by contributing on a pre-tax basis –where your taxes will be reduced by the amount you contribute to the Plan.
  • Contribute a portion of your pay on an after-tax (Roth) basis and earnings on your contributions may be tax-free upon withdrawal..
  • Or, contribute to your account with both pre-tax and Roth (after-tax) contributions.
  • Choose to invest your contributions in one of the Plan’s pre-arranged portfolios (also known as target date funds) or create your own portfolio by selecting from the Plan's core investment options.
  • Keeping track of your account is a breeze - access to your account is available online and by phone.

To learn more about the Plan, call our Customer Service Center at 212.306.7760 or register to attend a free Financial Wellness webinar.