Washington State Deferred Compensation Program (WSDCP) is a retirement savings program operating under Section 457(b) of the Internal Revenue Code (IRC). It is an agreement between an employee and the state that postpones ("defers") part of the employee’s income. This income deferral reduces current taxable income and allows the deferred income to grow untaxed until retirement. The state of Washington retains ownership of funds invested through this plan until retirement.
Note: WWU employees may participate in both the Voluntary Investment Program and the WSDCP in the same tax year at the same time. If you wish to maximize your tax deferred savings by using both plans in the same tax year, contact the Department of Retirement Systems at 1-888-327-5596 for assistance in plan enrollment.
You are eligible to participate in the WSDCP if you are a WWU employee working:
- Half-time or greater, or
- In a regular partial year appointment (9 month, 10 month etc) .
Under WSDCP, you have several investment choices depending on how closely you want to manage your portfolio:
- Choose among nine different funds including age-based Retirement Strategy funds, where you actively adjust and rebalance your own portfolio.
- Choose among components of a savings pool managed by the Washington State Investment Board or its designees. The pool is comprised of:
- Market index funds
- A socially responsible balanced fund
- A bond fund
- International fund
- Choose Retirement Strategy Funds, a diversified mix of equities and bonds that automatically adjusts and rebalances as you move toward your target date (when you expect to begin drawing your money).
During the 2013 tax year, you were allowed to defer up to:
- $17,500 if you are under age 50, or
- $23,000 if you are age 50 or over.
During the 2012 tax year, you may defer up to:
- $17,000 if you are under age 50, or
- $22,500 if you are age 50 or over.
Special limits may apply for those within three years of retirement. Contact the WSDCP for more information.
For enrollment materials, contact the WSDCP, or call the WSDCP Information Line at 1-888-327-5596. Once you have enrolled with WSDCP, theWWU Benefits Office will establish your payroll deductions according to instructions from WSDCP.
Call the WSDCP Information Line at 1-888-327-5596 to stop your contributions to the plan.