Explore the CSU Fee Waiver & Reduction Program
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The Savings Plus Plan (SPP) is a voluntary program which allows eligible state and CSU employees to save toward retirement by investing pre-tax or after-tax (Roth) contributions made through payroll deductions. This investment opportunity is offered through two deferred compensation plans:
- Thrift Plan (IRC 401k); and, a
- Deferred Compensation Plan (IRC 457)
You're eligible to enroll in a Savings Plus 401(k) and 457 plan if you're currently employed by the State of California, and you're eligible for membership in CalPERS, or if you separate from CSU system employment and return to service as a "rehired annuitant." (The term "rehired" annuitant, used in the CSU system, is also known as "retired annuitant" among State employees.) You're not eligible to participate in Savings Plus if you're in the Part-time, Seasonal, and Temporary (PST) Program.
One of the decisions you face when you sign up for Savings Plus is which plan to enroll in: 401(k) or 457. You can enroll in both, but that also means you'll pay administrative fees for both. The Savings Plus Plan comparison chart summarizes the two plans side by side.
401(k) Plans and 457 Plans have some things in common. For instance, both plans allow for before-tax contributions, Roth contributions, and rollover contributions from prior employer plans. Both plans limit withdrawals to qualifying circumstances, and both plans allow for age-based deferrals (age 50 or older). Once you contribute money to one of these plans within Savings Plus, it must remain in that plan until you're eligible for distribution.
The key differences between the 401(k) Plan and 457 Plan are as follows:
If you plan to retire before age 55 and begin withdrawals immediately, you should know that early withdrawal penalties apply to the 401(k), but not the 457 Plan.
Another difference is that you can withdraw funds from a 401(k) for a primary residence or college tuition, but not from a 457 account.
The 457 plan contains a “catch up” provision that allows you to contribute a higher amount to make up for the years you were eligible to contribute to a retirement plan but didn't. The 401(k) doesn't have this provision.
For more information or to enroll, go to http://savingsplusnow.com/.