Deferred Compensation Program
The Wisconsin Deferred Compensation Program, or WDC, is a supplemental
retirement savings program that is available to all active state
and university employees. Active local government and school district
employees may also be eligible if their employer has elected to
offer this optional benefit program.
The WDC is an Internal Revenue Code Section 457 deferred compensation
plan. The WDC allows participants to invest a portion of their pre-tax
earnings in a variety of investment options. Participants' deferrals
reduce their taxable income, which lowers their current State and
federal income taxes. Also, any interest or gains received grow
on a pre-tax basis. Several different types of investment options
are available for you to design a savings plan that is right for
you.
The dollars you save in the WDC only become taxable when you receive
a distribution. This is normally upon separation from service or
retirement, when you may be in a lower income tax bracket. This
program is not intended for use as a normal savings account. You
may only withdraw dollars from your WDC account at separation from
service, retirement, death or by demonstrating a severe financial
hardship as defined by federal tax laws.
The maximum deferral you can make to the WDC is 100% of taxable
income up to $16,500 per year in 2009. The additional age
50 catch-up maximum contributions in 2009 are $5,500, which means
you can contribute a maximum of $22,000 to the WDC if you are 50
or older during the 2009 calendar year.
The standard catch-up contribution amount has increased to $16,500,
which means you can contribute a maximum of $33,000 to the WDC if
you are within three years of normal retirement age.
If you are eligible for the catch-up options, you may contribute
to one option or the other. You may not contribute to both catch-up
options in the same year.
The Deferred Compensation Board contracted with Charles Schwab
& Co. to offer a self-directed brokerage option (SDO) to WDC
participants. Investments in the SDO can only be made as a transfer
of assets from the balance in a participant's core accounts. Over
2,000 mutual funds are available through the SDO.
A copy of the WDC Plan and
Trust document is included here. This document governs the WDC
plan procedures and policies.
For additional general information on the WDC, see Frequently
Asked Questions, the WDC
Fact Sheet, the WDC Internet
site, or contact the plan administrator at:
Wisconsin Deferred Compensation Program
5325 Wall Street, Suite 2755
Madison, WI 53718-7982
Telephone: toll-free 1-877-457-9327
E-Mail: wdcprogram@gwl.com
TTY: 1-800-766-4952
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