The Catch-up Provision allows participants
nearing retirement age to increase their maximum annual deferral
to as much as $15,000. This may be done if the participant has
underutilized deferrals from prior years of participation under
the Plan. Underutilized deferrals are defined as the difference
between the participantís actual annual deferral amount and the
maximum allowable annual deferral amount that has accumulated
in the participant's account. Total underutilized deferrals are
updated annually and shown on the participantís quarterly statement
of account as "Available Catch-up Amount".
A participant in the Plan may enter
the catch-up provision for any or all of the three years prior
to, but not including, the year retirement becomes effective.
The minimum age for entering catch-up is three years before the
year that the participant could retire and immediately receive
an unreduced retirement benefit.
For example, the earliest possible
retirement age for a PERS employee that would not lead to a reduced
pension is an "Early Retirement" at age 55. The first
eligible year for this employee to exercise the Catch-up Provision
under Deferred Compensation is the year in which he or she reaches
The participant must also have accumulated
underutilized deferral amounts. Catch-up dollars accumulate only
if the participant has not deferred the maximum allowable during
the years of participation in the Deferred Compensation Plan.
During participation in Catch-up,
participants may defer up to a maximum amount of $15,000 per year
for any or all of the three years prior to retirement, providing
the participant has accumulated a sufficient catch-up dollar amount.
In order to enter into catch-up,
the participant must indicate on a "Deferred
Compensation Catch-up Election form" the elected
retirement date and the percentage of payroll deferral.
Upon reaching this projected retirement date the participant will
no longer be eligible to utilize any remaining catch-up amounts
that may remain available.
The catch-up provision may only
be used once. A participant changing a declared retirement date
would not be eligible to elect the catch-up provision again.
Transfer forms received
in the Deferred Compensation Office are immediately date stamped
and reviewed by Plan personnel to determine:
- If the employee is a plan participant;
- If the name, Social Security number,
payroll center and check distribution code are completed;
- If the percentage to be deferred
is between 2% and 70% (if allowable);
- If the percentage is in whole
numbers (fractions are unacceptable);
- If the participant has signed
and dated the form;
- If the authorized personnel representative's
signature and date signed are present (required for any change,
suspension or resumption of payroll deduction, optional on all
In the case of a change, suspension,
or resumption of payroll deductions, or entrance into the catch-up
provision, the effective date would normally be the second pay
date of the month following the month of receipt in the Deferred
Compensation Plan Office. However, if the participant is not
under the Stateís Centralized Payroll and the pay center has a
payroll schedule that warrants an effective date other than the
second pay date of the month, an approved schedule may be determined
by the Deferred Compensation office.
In the case of a change in investment
election, the effective date would normally be the first pay date
of the month following the month of receipt in the Deferred Compensation
Plan Office. In the case of transfer of investment balances, the
effective date would normally be the last calendar day of the
month in which the change form is received.
Any incomplete Balance Transfer
submitted to the Plan will be date stamped and returned immediately
to the participant's personnel office, unless the participant
is retired or otherwise terminated from service with the State,
in which case the form is returned directly to the participant.
A cover letter stating the reason for rejection will accompany
the returned form.
Properly completed or corrected Balance
Transfer forms are date stamped and confirmed at the bottom
(Balance Transfer Confirmation section) with a Deferred
Compensation representativeís signature. The effective date(s)
is entered as indicated in each relevant section of the Balance
Transfer form by the Deferred Compensation Office. The confirmed
forms are then distributed as follows:
- White Copy:
Retained by the Deferred Compensation Section for keypunching,
and subsequently filed in the participant's account folder by
Social Security number.
- Green Copy: This copy will
be returned to the appropriate Centralized Payroll Office to
update the participantís payroll deduction file. If section
A of the Balance Transfer form has not been completed,
this copy is destroyed, since no payroll deduction is affected.
- Canary Copy: Returned to
the participant's personnel office to be maintained in the payroll
or personnel file.
- Pink Copy: Returned to
the participant's personnel office to be forwarded to the participant
as a confirmation of the action.
- Gold Copy: Retained by
the participant or personnel office before submission to the
Deferred Compensation Office for processing of the form as a
record of filing.
- If the participant is retired
or otherwise terminated from service with the State and is filing
a Balance Transfer form to transfer balances, the copies
will be returned directly to the participant's home address.