State of Illinois Deferred Compensation Plan
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- Deferral limits will increase for 2023. The IRS announced that contribution limitations governing 457(b) plans will increase for 2023 as the increase in the Consumer Price Index was sufficient to meet the statutory thresholds for its adjustment. Therefore, the elective deferral (contribution) limit for employees who participate in Deferred Compensation will increase to $22,500. The additional over-50 catch-up contribution limit will increase to $7,500, making the total contribution limit for those aged 50 and older $30,000. The Special Catch-up limit will increase to $45,000.
The State of Illinois Deferred Compensation Plan (“Plan”) is a supplemental retirement program for State employees. Contributions to the Plan can be made on a pre-tax or Roth basis through salary deferrals. The combined pre-tax and Roth contributions cannot exceed the limit set by the IRS. In 2023, employees are allowed to defer up to $22,500. Employees over age 50 are allowed to defer up to $30,000. Employees enrolled in Special Catch-Up are allowed to defer up to $45,000. Participants that are within three years of retiring must contact CMS Deferred Compensation to apply for Special Catch-Up.
Pre-tax contributions, together with any earnings, accumulate tax-deferred until the employee terminates service, dies, or incurs unforeseeable financial hardship. Once distributions begin, the distributed monies are fully taxable as ordinary income for federal tax purposes. The funds are never taxed by the State of Illinois.
Roth contributions, together with any earnings, qualify for tax-free distribution when the initial after-tax contributions to the account are at least 5 years old and the employee is age 59 ½ or older, dies, or becomes disabled.
Fund Yields Determine the investment results for each of the funds and their appropriate benchmark indexes.
QDRO Consultants (For completing Qualified Domestic Relations Orders)
CMS Deferred Compensation Office
801 S. 7th Street
PO Box 19208
Springfield, Illinois 62794-9208
800-442-1300 (Toll Free)