457(b) Deferred Compensation Plan Overview

Below are the important features about your employer's plan. This website is intended to be a summary of the plan provisions.  In the event that a conflict exists between the information contained within this website and the plan document, the plan document provisions prevail.

As an employee of an Ohio public university, you may also be eligible to participate in a 457(b) deferred compensation plan to supplement your Ohio ARP, SERS, STRS, or PERS basic retirement plan. What’s more, you can participate in a 457(b) plan without reducing the amount you may contribute to a 403(b) program. 

A 457(b) deferred compensation plan is a type of defined contribution plan available under Section 457(b) of the Internal Revenue Code. State and local governmental entities, including public universities, may offer a 457(b) plan. Employee contributions are made on a pretax basis through payroll reduction. 

As with the 403(b) Plan, you have choice and control over your investments and you can take your account with you should you sever employment with your university. There is no IRS 10% premature distribution penalty tax on withdrawals of 457(b) benefits (if you roll over non-457 money into the 457(b) Plan, that money is subject to the 10% premature distribution penalty tax if withdrawn prior to age 59½). 


  • No front-end sales charges – 100% of your contribution is invested in your variable annuity account 
  • No maintenance fee 
  • No administrative fee 
  • 1.25% Mortality and Expense Risk Charge (investment management fees will also apply) Fees depend on the investment option chosen. Please refer to the Contract Prospectus Summary for individual fund fee information.
  • 10 year Deferred Sales Charge (DSC), which is waved at:
  • separation of service
  • retirement
  • death, or
  • unforeseeable emergency withdrawal
  • Loans may be available (loans will reduce your account balance) 
  • A variety of annuity/payout options at retirement 
  • Personalized, prompt account services 
  • Retirement information and services that continue even after you retire 
  • Guaranteed interest rate on fixed interest options
  • No cost transfers between variable investment options via Internet, phone, or in writing 
  • Personalized, individual assistance 

Please refer to the disclosure materials in your Enrollment Kit (in the “Enrollment” section of this website) and/or the “Performance Report”( in the “Investment Performance” section of this website) for specifics regarding charges, expenses, fees, transfer restrictions, etc.

Who should be interested in the 457(b) Deferred Compensation Plan?

Newly Hired: 457(b) plans could be ideal for new employees, as some newly hired employees may leave the University within their first few years. Because Internal Revenue Code section 457(b) plans are not subject to the IRS 10% premature distribution penalty tax that may be imposed by the IRS on early withdrawals from other qualified plan types (including 403(b) programs), these monies are available to withdraw as you see fit upon severance from employment with the sponsoring school. 457 withdrawals will be taxed as ordinary income in the year of withdrawal.

Younger Retirees: 457(b) plans can help provide a financial bridge for those who are eligible to retire prior to attaining age 55 and who otherwise cannot access their 403(b) accounts without incurring the IRS 10% premature distribution penalty tax. 

Newly “Rehired” Retirees: Due to a national shortage of both educators and administrators, there appears to be a growing trend for educators to retire from one university, draw their retirement benefits from STRS, PERS, or SERS, and then seek reemployment at the same or new employer. Many employees want the opportunity to maximize their savings during these years. The contribution limit in 457(b) plans in addition to any contributions you make to a 403(b) Tax Deferred Annuity. 

Super Savers: Many employees want to maximize their retirement savings. If a university offers both a 403(b) and 457(b) plan, employees may defer income into both plans, to up the maximum deferral limit for that year. Special catch-up provisions also can help increase the amount a plan participant may defer (an individual’s earnings will affect the maximum deferral available). 


Under the Plan, the maximum annual contribution amount is set by Internal Revenue Service (IRS) guidelines on a yearly basis. You may view the current limits here

This annual contribution limit is not reduced for contributions made to a 403(b) program, 401 plan, or IRA. 

Catch-up Provisions

If you are in the last three years prior to attaining your plan's normal retirement age, you have the opportunity to contribute up to twice the normal amount. There is also a special catch-up for those who are age 50 and older. For more information about the catch-up contributions, contact your representative.


  • Distributions are permitted from the 457(b) Plan only under the following circumstances:
  • Severance from employment 
  • Death 
  • Unforeseeable emergency (if elected by your school district) 

In addition, the IRS requires that you begin receiving minimum distributions at the later of when you attain age 70½ or retire.

Distributions are taxed as ordinary income in the year the money is received. Unlike a 403(b) or 401 Plan, if the employee severs from employment prior to age 59½, the distributions are generally not subject to a 10% premature distribution tax penalty. 


  • One loan is allowed every 12 months 
  • Minimum account balance of $2,000 required 
  • Minimum loan amount is $1,000 
  • Net interest rate of 2.5% 

Please note: loans will reduce your account balance, may impact your withdrawal value and limit participation in future growth potential. Other restrictions may apply.

Distribution Options

We have developed several payout options available to you when you are ready to receive a distribution. With these options, the emphasis is on flexibility. You can receive your benefits in any one of the following ways. Remember, taxes are due at withdrawal, so we suggest you discuss your income tax liability with your accountant or attorney before choosing an option:

  • distribution over your lifetime; 
  • distribution over your lifetime and the lifetime of your designated beneficiary; 
  • distribution over a set time period not extending beyond your life expectancy; 
  • distribution over a set time period not extending beyond the joint and last survivor life expectancy of both you and your beneficiary; 
  • a lump-sum, or partial lump-sum distribution in combination with one of the other options; 
  • an estate conservation option that allows you to receive only the minimum amount required by law at either age 70½ or retirement, whichever comes later; or 
  • a systematic withdrawal option that provides periodic income for either a specific investment amount, a specific dollar amount, or a specified time period (including your life expectancy) at retirement or separation from service.  

Guaranteed Death Benefit

A guaranteed death benefit is available if the beneficiary requests either a lump-sum payment or an annuity option within six months of the participant's death subject to provisions of the plan. Guarantee applies to the claims-paying ability of ING Life Insurance and Annuity Company. 

You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses/prospectus summaries containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.

Group annuities are intended as long-term investments designed for retirement purposes. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.

Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) Voya Retirement Insurance and Annuity Company, One Orange Way, Windsor, CT 06095-4774. Securities are distributed by Voya Financial Advisors LLC (member SIPC). All companies are members of the Voya™ family of companies. Securities may also be distributed through other broker-dealers with which Voya has selling agreements. Insurance obligations are the responsibility of each individual company. Product and services may not be available in all states.