Changes in the Administration of
the New Jersey State Employees Deferred Compensation Plan
On October 25, 2005, the State Treasury
and New Jersey State Employers Deferred Compensation Board announced
that Prudential Retirement, a business of New Jersey-based Prudential
Financial, has been selected as the third party administrator
for the New Jersey State Employees Deferred Compensation Plan
(NJSEDCP). Because of this change in the administration of the
NJSEDCP, effective January 1, 2006, some of the information provided
below may no longer be accurate; other information has been added
to incorporate the changes brought about by the plan administration
changes explained above. The Division of Pensions will provide
any additional procedural updates regarding the NJSEDCP as soon
as they become available.
If you have questions, contact Prudential
Financial, toll-free at 1-866-NJSEDCP (1-866-657-3327). Toll-free
TDD is available at 1-877-760-5166; or visit Prudential's
NJSEDCP Web site at: www.prudential.com/njsedcp.
of a Participant
of an Active Participant
In the event of the death of an active
Plan participant, the third party administrator of the Plan, presently Prudential Retirement, must receive
a certified copy of the death certificate as soon as possible
to initiate payment of the account. The designated beneficiary(ies)
on file with the Plan administrator will be notified of the options
and procedures for filing for account distribution.
If the active participant is older
than normal retirement age, the beneficiary must begin account
distribution. Account distribution will begin following receipt
of the necessary forms, as dictated by the processing cycle, unless
In the case of the death of an active
participant younger than normal retirement age, the named beneficiary
may delay commencement of distribution until the month following
what would have represented the original participant's normal
retirement age. The beneficiary will be provided with the same
options that would have been available to the original participant
upon termination of service, retirement, or disability.
Participants may change beneficiaries
at any time during Plan participation by filing an updated Beneficiary form with Prudential Financial.
Death of Participant Currently
Upon notification of the death of
a Plan participant receiving distributions from a Deferred Compensation
account, the named beneficiary on file with Plan administrator
will be contacted with the procedures for recommencing account
payment. The beneficiary will continue to receive the balance
of installments that would have been due to the original participant
(unless extenuating circumstances exist).
If the named beneficiary is not a
person, for example the participant's estate, the balance of the
account will be paid as a lump-sum.
Participants may change beneficiaries
at any time during Plan participation by filing an updated Beneficiary form with the Deferred Compensation
Federal Tax Implications
Contributions into the New
Jersey State Employees Deferred Compensation Plan are exempt
from federal income tax withholding. All distributions
from the Deferred Compensation Plan are deemed to be supplemental
wages and, as such, according to Revenue Ruling 82-46, are
subject to federal income tax withholding. The Deferred Compensation
Plan currently withholds federal income tax based upon information
provided to the Plan on Form W-4, Employee's Withholding Allowance
Those receiving distributions from
Deferred Compensation will be issued a W-2 for the applicable
tax year. Distributions are considered wages for the tax year
in which they are received and will be taxed accordingly.
State Tax Implications
The New Jersey State Employees Deferred
Compensation Plan will issue, in the appropriate tax year, a W-2
that includes the State taxability of Deferred Compensation distributions.
All contributions into the Deferred Compensation Plan have been
subject to State taxes. Only the gain portion of the distribution
will be included as income for State tax purposes.
Process and Requirements