457 Deferred Compensation and Cash Match Plans
If you participate in the Commonwealth of Virginia 457 Deferred Compensation and Cash Match Plans, you have these options:
- You may keep your funds in the 457 Plan and continue to manage your investments. You cannot contribute to the plan unless you return to salaried or wage employment with an employer that offers the plan.
- If you have a Virginia Cash Match Plan account, you may request a rollover of your 457 Plan funds to your cash match account, an Individual Retirement Account (IRA) or another qualified retirement or tax-deferred savings plan.
- You may request a payment of your 457 plan funds and any cash match funds by electing a lump sum, a periodic payment or a combination of these distribution methods. Funds paid directly to you are subject to federal and state income taxes. Cash match funds also may be subject to a 10 percent federal tax penalty if you withdraw them before age 59½. Payments from the 457 Plan are not subject to this tax penalty.
- If you receive a payment for unused sick leave or annual leave at your layoff date, you can roll over this payment to your 457 Plan account. This is allowed only if you provide your employer with a properly completed Payroll Authorization - One-Time Deferral form before your last day of employment. The form must be submitted to your employer no later than the month prior to the month in which the contribution will be sent to the plan.
As provided under the Internal Revenue Code, participants cannot contribute cash severance payments to the 457 Plan. For more information, go to Defined Contribution Plans.