About the 457/401(a) and PEHP Plans
You’ve probably heard of the different types of retirement plans: 457(b) Deferred Compensation, 401(k),
As the plan administrator of the city of Phoenix 457(b) Deferred Compensation, 401(a) Defined Contribution Plans and Post Employee Health Plan (PEHP), Nationwide® has worked with public sector employees for more than 40 years, so we know the kinds of questions you may have about the city’s 457(b) and 401(a) Plans. We’ll give you the tools and information to help you feel confident about investing for retirement. Keep in mind that investing involves market risk, including possible loss of principal. As you get started in the city’s Plans, we’ll help you understand market risk and strategies that may help you deal with it.
The city of Phoenix has created two plans to allow public employees like you to put aside money from each paycheck toward retirement. Review our Plan Summary to easily compare the two plans. These two plans can help bridge the gap between what you have in your pension and Social Security, and how much you’ll need in retirement. Keep in mind that the city’s 401(a) Plan has a limited enrollment period. Therefore, you cannot enroll online nor access forms online. If you are interested in enrollment in this Plan, you should contact Nationwide’s local office or their toll-free number. The city of Phoenix also has a PEHP Plan.
Can I combine retirement accounts?
Plan Service Representatives will work with you to combine, or consolidate, your other eligible retirement accounts into your account. This may make managing your retirement investments a little easier.
Qualified retirement plans, 457(b), 401(a) and PEHP Plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½. Neither Nationwide nor any of its representatives give legal or tax advice. Please contact your legal or tax advisor for such advice.
How much can I contribute to my plan?
Check out the current contribution limits.
Get the help you need
The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist to see what you'll need to have handy and enroll today!
There are three steps to participating in the city of Phoenix 457(b) and 401(a) Plans:
Enroll in one or both Plans – It’s easy to participate. If you qualify, you may want to consider participating in the City of Phoenix 401(a) Plan. It offers higher contribution limits than available through the 457(b) Plan. However, the 401(a) Plan has a limited enrollment period and the decision, once made, is irrevocable. You can choose to enroll in the 457(b) Plan at any time.
Contributions are automatically deducted from each paycheck and deposited to your account, so you don’t have to remember to write a check.
Use the Paycheck Impact Calculator to see how saving pre-tax will affect your paycheck.
Invest your money – You’ll choose funds from the list of investment options available within the plans. Keep in mind, any investment involves risk and there’s no guarantee that any fund will achieve its investment objectives. But, we’re here to help.
Use the My Investment Planner to get a personalized retirement strategy, including recommendations for your retirement income goal, savings rate and portfolio asset mix. You’ll need to enroll first and then set up online access to use this tool.
Receive income –Many public employees retire earlier than those in the private sector, and if that’s the case, you’ll want to invest enough to live in retirement on your terms. Before you begin taking payments, review our Retirement Checklist to make sure you’re ready to transition from saving to spending.
When you’re ready to receive income, these tips will help you do so wisely. Depending on the plan type you’re invested in, there may also be a 10% penalty on distributions prior to age 59½. Withdrawals are taxed as regular income in the year the payments are made.
Get more info on how to consolidate your retirement accounts to make managing money easier in retirement. Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59 ½. Neither Nationwide nor any of its representatives give legal or tax advice. Please contact your legal or tax advisor for such advice.
Get the help you need
The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist to see what you’ll need to have handy and enroll today!
If you qualify, you may want to consider participating in the city of Phoenix 401(a) Plan. It offers higher contribution limits than available through the 457(b) Plan. However, the 401(a) Plan has a limited enrollment period and the decision, once made, is irrevocable.
The city of Phoenix 457(b) Plan helps put you in control of when, where and how much you invest.
Contributions to both Plans are pre-tax which basically means that you don’t pay income taxes on your 457(b) or 401(a) plans contributions or earnings until you retire and begin to take payments from your account. This may lower your taxable income now and in retirement.
Here are more reasons why it’s smart to participate in the city’s 457(b) Plan:
1. You can start anytime
The city's plan will work for you whether you're approaching retirement or just getting started investing – putting away money in a tax-deferred account can offer several benefits.
- See how your investment can potentially grow due to the power of time and compounding.
- Use the Future Value Calculator to see how delaying enrollment could impact your savings.
2. Every little bit helps
Even investing a little bit of money can really add up over time – it's just important to get started! And if you continue to bump up contributions on a regular basis, the overall impact to your paycheck may not seem too painful. Consider putting raises or bonuses into deferred comp – it's an easy way to invest a little more.
|Growth Period||Ending Balance|
|Deferral Per Pay||Paycheck Impact||Annual Pay Reduction||Accumulation 10 Years||Accumulation 20 Years||Accumulation 30 Years|
This table shows the cumulative value of 26 biweekly deferral amounts over 10, 20, and 30 years, assuming a compound annual rate of 7% and a 25% federal tax rate, for a single person with an annual salary of $38,000 and one deduction for federal tax purposes. Actual investment returns will vary from year to year, and the value of your account after the specified periods of years shown in the table may be less or more than the amounts shown. This illustration is hypothetical and is not intended to serve as a projection of the investment results of any specific investment. If fees and expenses were reflected, the returns would have been less.
3. This plan is made for you
Unlike other retirement plans, a 457(b) deferred compensation plan takes into account that you may retire sooner than workers in the private sector. Generally, you don’t have to worry about paying a penalty for retiring early or beginning to take income from the plan before age 59½.
Read Why Invest Now? to learn why it's smart to get started with your deferred compensation now.
4. You'll get service you can count on
Nationwide® is ready and willing to answer your questions. We've been helping public sector employees save for retirement for more than 30 years and our Retirement Specialists have helped educate thousands of employees about investing through their retirement plans. Feel free to call today — we don't charge a fee to work with a Retirement Specialist.
Read more about why Nationwide may be right for you.
Get the help you need
The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist for tips on the information you'll need to have handy and enroll today.
As a participant in the city of Phoenix 457 and 401(a) Plans, you'll have access to a wide range of investment options. Your investment options were selected by the plans and can help meet your retirement planning needs. Keep in mind that investing involves market risk, including possible loss of principal. As you get started in the plan(s), we'll help you understand market risk and strategies that may help you deal with it.
Understand your options
The investment choices available to you fall into four major asset classes:
- Target Retirement Date Funds
- Stock fund
- Bond funds
- Fixed-income investment option
There are five classes of stock funds we offer:
Get the help you need
Talk to a Plan Service Representative about your investment options or learn more about how to choose funds. Information provided by Plan Service Representatives is for educational purposes only and is not intended as investment advice. Note: Plan Service Representatives may also be referred to as "Retirement Specialists" elsewhere on this website.
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It only takes a few minutes to sign up. Here are some things you'll need:
- Your employer's name
- Your Social Security number
- Your annual income
- Contribution amount
- Investment selections
- Read about your investment options
- Beneficiary names and Social Security numbers
Get the help you need
We'll even walk you through it. If you need more help, call one of our Plan Service Representatives.