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New Jersey State Employees
Deferred Compensation Plan (NJSEDCP)


  Changes in the Administration of the NJSEDCP  
 
Catch-up
 
   

Provisions for Catch-up 

 
   

Forms Processing

 
 

Additional Information

 
   

Employer Procedures Guide

 
   

Determining Eligibility

 
   

Enrollment

 
   

Emergency

 
   

Death

 
    Distribution  

 


    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 procedural updates regarding the NJSEDCP as soon as they become available.

Catch-up Provision

The Catch-up provision allows participants within three years of retirement from employment to make a catch-up contribution in addition to their regular pre-tax contribution. The allowable catch-up amount is one times the pre-tax contribution amount the participant is making for the year, up to a maximum additional annual deferral of $15,000.

"Catch up" is allowed if the participant has underutilized deferrals from prior years of participation under the Plan. Underutilized deferrals are defined as the difference between the maximum allowable annual deferral amount and the participant's actual annual deferral amount that has accumulated in the participant's account. Total underutilized deferrals are updated annually and shown on the participant's 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 age 52.

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.

Processing Change Forms

Balance Transfer forms must be processed through Pudential Financial. 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.


For more information:

Employer Procedures Guide

Enrollment

Emergency

Death

Distribution

 

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Last Updated: October 20, 2009