Comparison of a 403(b) plan and the
State of Missouri Deferred
Compensation Plan
www.modeferredcomp.org | 800-392-0925
Eligibility
403(b) plan
State of Missouri Deferred Compensation Plan
Part-time or full-time higher education employees, upon
date of hire or anytime thereafter.
Part-time or full-time state and higher education
employees, upon date of hire or anytime thereafter.
Excludes state employees.
Maximum Annual Deferral
Visit the IRS website to determine this year’s annual limits.
Visit www.modeferredcomp.org to determine this year’s
annual IRS limits.
Investment Options
Variety depends on 403(b) provider.
Custom, professionally managed, diversified, low cost
Target Date Funds, a monthly valued asset allocation
fund, a Stable Income Fund and a self-directed brokerage
window.
Saver’s Credit
Eligible participants will receive a non-refundable tax credit up to 50% on an annual contribution of $2,000 in elective
deferrals, in addition to the tax deferral. To submit, complete IRS Form 8880. Visit www.modeferredcomp.org to learn
more about eligibility for this credit.
Age 50 and Over
Catch-Up Provision
If you are age 50 or older, you may contribute an additional amount. You may not use this provision in a 457 plan
while using the Pre-Retirement Catch-up Provision. Visit www.modeferredcomp.org to determine this year’s annual
IRS limits.
Pre-Retirement
Catch-Up Provision
The Pre-Retirement Catch-up Provision is not available
in a 403(b) plan. 403(b) plans offer a catch-up option,
but with different requirements. Contact your 403(b)
administrator to see what they allow.
If you have not contributed the maximum amount
each year, you may be eligible to take advantage of
the Pre-Retirement Catch-Up Provision and contribute
up to double the regular maximum in effect for the
three years leading up to the year of your normal
retirement age. Visit www.modeferredcomp.org to
determine this year’s annual IRS limits.
Loans
Loans may be available to the extent provided by the
annuity contract or custodial account.
Loans are not available.
Financial Hardship/
Emergency Withdrawals*
Reasons for hardship include purchase of a primary
residence, prevention of eviction or foreclosure from your
primary residence, tuition expenses, or non-reimbursed
medical expenses.
Emergency withdrawals are permitted in cases of severe
financial hardship created by:
•Sudden and unexpected illness or accident to
you, your spouse, your dependents or your
primary beneficiary.
•Loss of, or damage to, your property due to an
accident, disaster, destruction, or theft, or
•Other similar, equally severe and unforeseeable
circumstances beyond your control.
Cannot be used with the
Age 50 and Over Catch-Up in
the 457 Plan.
Only allowed when you
have no other resources,
including Plan loans, by
approval.
* Please refer to IRS website for additional information on hardship (403(b) plans) and emergency (457 plans) withdrawals.
For more information on the State of Missouri Deferred Compensation Plan, visit the Plan website at www.modeferredcomp.org
or call 800-392-0925.
403(b)
State of Missouri Deferred Compensation Plan
Rollovers In
Contact your 403(b) administrator to see what they allow.
If eligible, you may roll funds into the State of Missouri
Deferred Compensation Plan from other eligible plans.
Distributions While
Employed
You may take a distribution from your 403(b) plan
after age 59½ while still employed without a 10%
early withdrawal penalty; 20% will be withheld for
federal income taxes unless funds are rolled to a
qualified plan.
Distributions After
Separation from
Employment
After separation from state employment, at 59½, or at age
70½. You may roll funds into other types of employersponsored plans, IRAs or other eligible options. Lump-sum
distributions have 20% automatically withheld for federal
taxes. To avoid the 20% withholding, you may do a direct
rollover to an eligible retirement plan, IRA, or other
eligible option.
Required Minimum
Distributions (RMD)
No later than April 1 following the year in which you turn 70½, unless you are still employed.
Tax Penalties
A 10% federal penalty applies to distributions made before 457 plan contributions and associated earnings that
age 59½.
remain in the plan until distributed are not subject to the
10% early withdrawal penalty. However, rolled-in assets
Failure to withdraw the required RMD amounts may result may be subject to the 10% early withdrawal penalty if
in IRS penalty taxes equal to 50% of the amount that
withdrawn prior to age 59½, unless an exception to the
penalty applies.
was not withdrawn from the account within the required
timeframe.
Failure to withdraw the required RMD amounts may result
in IRS penalty taxes equal to 50% of the amount that
was not withdrawn from the account within the required
timeframe.
FLY570-044-0113-6250-C2449
Revised 12/2012
•(See Financial Hardship/Emergency Withdrawals)
• After age 70½
• Small account balance (de minimis). If your balance is
under $5,000 and no contributions have been made
for a period of two years.
• 20% may be withheld for mandatory federal income
tax.
After separation from state employment or at age
70½. Flexible distribution options are permitted. You
can request a lump-sum distribution, set up periodic
installment payments, or request a direct rollover to
an eligible retirement plan or IRA. Assets are generally
taxable in the year in which they are withdrawn and
distributions may be subject to a mandatory 20% federal
tax withholding.