What is a Deferred Compensation Plan?
A Deferred Compensation Plan, also known as a 457(b) plan, provides employees with an additional way to save for retirement through convenient payroll deductions.
City of Austin employees may enroll in the City's deferred compensation plan administered by Empower. Similar plans are commonly offered by public- and private-sector employers to help employees build additional retirement savings.
Many financial professionals recommend supplementing a pension with personal retirement savings to help meet retirement income goals. A deferred compensation plan can help you save for future expenses, provide additional flexibility during retirement, and support your long-term financial goals.
Deferred compensation savings may be used to purchase eligible service credit at retirement, which can increase your annuity benefit. Funds may also be distributed as a lump sum, partial lump sum, or through periodic payments, subject to plan provisions and applicable tax rules.
How Deferred Compensation Differs from Your COAERS Pension
| Deferred Comp | COAERS |
|---|---|
| Voluntary – sign up at any point and determine your own level of saving | Automatically enrolled and contributions are automatically deducted |
| Choose tax deferred plan or Roth plan | Contributions are tax-deferred |
| Loans from the plan are allowed under certain circumstances | No loans allowed; your funds must remain on deposit |
| Rolling other eligible funds INTO the plan is allowed. If you have balances from 457(b), 403(b), 401(k) or 401(a) plan, or an IRA, you can consolidate these in your Empower account | All the funds in your account are from your contributions and applied annual interest |
| You bear the risk of the market both on the upside and the downside | COAERS bears the risk of the market |
| You have some say in how the money is invested; the risk tolerance is yours. | COAERS investment staff handles all investments for the long-term health of the plan |
| You can potentially outlive this money | You can never outlive your retirement |
Important: Deferred compensation savings are separate from your COAERS retirement account and pension benefit.
How to Enroll
Active City of Austin employees who are not currently participating in the deferred compensation plan may contact Empower to learn more about enrollment options.
Phone: 866-613-6189
Employees of affiliated employers should contact their Human Resources department for enrollment information.
Resources for Current Participants
Current Empower participants may be eligible to schedule one-on-one meetings with financial professionals through the plan. These services can help participants better understand retirement planning, investment strategies, and long-term savings goals.
Contact Empower
Website: www.DCAustin.com
Phone: 866-613-6189
Local Phone: 512-457-9240
Email: dcaustin@empower.com
This page provides information and links to not-for-profit external websites that we believe may be of interest to our membership and is made available as a public service. COAERS is not responsible for the content or the security of such sites nor any damage to those accessing these sites or damage caused by the use of the products and services provided by these resources. Resources have been chosen according to our Social Media policy and for the purpose of providing useful, relevant, information avoiding for-profit entities, political organizations, organized labor organizations, and individuals or entities soliciting money or donations