457(b) Plan Overview

Below are the important features about your 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 Fact Sheet, the Plan Fact Sheet provisions prevail. For more information, please contact your local representative.


Each employee may elect to become a participant of the Plan and defer payment of part of his or her compensation by enrolling in the Plan. 


Contributions under the Plan are made by participants through a reduction in salary. Under the Plan, the minimum bi-weekly contribution is $25.00 and the maximum annual contribution amount (or 100% of includible compensation, if less).

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.

Rollovers into the 457(b) Plan

The City of San José 457 Plan currently accepts rollovers from 457(b), 401(a), 403(b), and 401(k) plans.

Please note: assets rolled over from non-457(b) plans into the 457 plan will remain subject to the IRS 10% premature distribution penalty tax for withdrawals taken prior to age 59 1/2, unless an IRS exemption applies.

Consider all of the aspects of each plan including fees, charges, expenses, underlying investment options and other features before making an investment related decision.

Timing of Distributions


Distributions are allowed only upon your separation from service, death, or incurring of an unforeseeable emergency, which are considered to be triggering events. The Plan also includes a provision allowing the in-service distribution of accounts that do not exceed $5,000, if certain conditions are met. 

The IRS requires that distributions under a 457(b) plan begin no later than the April 1 of the calendar year following the calendar year in which you attain age 72 or separate from service, whichever occurs later. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not timely distributed. These rules are referred to as IRS required minimum distribtuions (RMD).

  • Retirement - distribution available after 30 days
  • Severance from employment - distribution available after 30 days.

Payment Options

Under the Plan, you have the choice from a variety of payout options*, these include:

  • Distribution over your lifetime.
  • Distribution over your lifetime and the lifetime of your designated beneficiary.
  • Distribution over a set period, not extending beyond your life expectancy.
  • Distribution over a set period or time, not extending beyond the joint and last survivor life expectancy of both you and your designated beneficiary.
  • Systematic withdrawal of your account over a specified period, or of a specified amount.
  • Lump sum, or partial lump sum distribution, in combination with other options.
  • Distribution of an annuity contract (immediate or deferred)
  • Transfer of all or a portion of your benefits to another eligible 457(b) deferred compensation plan.

Rollover your benefits into another employer-sponsored or eligible retirement plan (an eligible retirement plan is a 401 qualified plan, a 403(b) tax deferred annuity program, or another governmental 457(b) deferred compensation plan) or a traditional IRA.

Consider all of the aspects of each plan including fees, charges, expenses, underlying investment options and other features before making an investment related decision.

*Some options require a minimum account balance 

Estate Conservation Option (ECO) 

This option will provide you with the Required Minimum Distribution (RMD) Amount determined according to Internal Revenue Service (IRS) requirements. Annual amounts are calculated by dividing your previous December 31 account value by a life expectancy factor. The life expectancy factor is determined by IRS tables and may be based on your life expectancy or the joint life expectancies of you and your designated beneficiary. Joint life expectancy results in smaller distributions and benefits are spread over a longer time.

  • ECO can only be elected if you are at least age 72 and retired.
  • The minimum account cash value to elect ECO is $5000.
  • Payments are made annually.
  • Payments are recalculated each year by IRS tables, unless otherwise required by law.

We are not responsible for calculating minimum distributions in the year amounts are rolled to us. 

Death Benefits

Upon your death, benefits would be payable to the beneficiary(ies) that you designated under the Plan. If the participant dies without naming a beneficiary or if the person(s) named are no longer alive at the time of death, the account balance will be paid to the estate of the participant in a lump sum. The Plan will provide a variety of payout options available for the payment of death benefits to beneficiaries. Your beneficiary must notify Voya Financial® of your death and make a payment election in accordance with the Plan. 

It is important to note:

If you have a change in status, your designation is not automatically updated. For example, if your spouse is your beneficiary, that designation is not void as a result of your divorce. Your ex-spouse would remain your plan beneficiary until you make a change to your designation. The beneficiary you designate under the Plan is separate from any designation you may have made under the City’s pension plan or other programs in which you participate.

If you are unsure who your current beneficiary is, you may contact Voya® for further information and assistance.


Amounts distributed directly to you from the plan will only be taxable to you when actually paid. Amounts will be reported on IRS Form 1099R, and will be subject to 20% federal tax withholding (to the extent that the distribution is rollover eligible). 457(b) plan benefits are not subject to the IRS 10% premature distribution penalty tax, even if distributed prior to attaining age 59½. Rollover amounts from a non 457(b) Plan will be subject to IRS 10% premature distribution penalty tax, unless an exception applies. In addition, distributions from the Plan can be rolled into other eligible retirement plans, 401(a), 401(k), 403(b), other governmental 457(b) plans or an IRA.

Consider all of the aspects of each plan including fees, charges, expenses, underlying investment options and other features before making an investment related decision.


In the event of your divorce, the court may issue a domestic relations order that addresses the split of your account and the payment of a portion of your benefits to an alternate payee. Voya® will review your domestic relations order to determine whether it satisfies the Plan and IRS requirements for a Qualified Domestic Relations Order. If it does, and the alternate payee is your former spouse, he or she is entitled to elect immediate distribution of the amounts awarded under the QDRO. A spousal alternate payee is also eligible to rollover amounts awarded to another eligible retirement plan in which he or she participates. Please review the Human Resources Divorce Information document before initiating the process.

To obtain additional information, including the paperwork Voya® will need from the City, please contact Service Center.

Unforeseeable Emergency Withdrawals

Internal Revenue Code Section 457(b) defines an unforeseeable emergency as a severe financial hardship to the participant or the participant’s beneficiary (collectively referred to as the “account holder”) resulting from: An illness or accident involving you, your beneficiary, the spouse of you or your beneficiary or a dependent (as defined by the IRS) of you or your beneficiary;

  • The loss of your or your beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance, such as a result of a natural disaster); or
  • Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your or your beneficiary’s control.
  • Even if the account holder meets the above requirements, this does not mean that he/she will be able to withdraw funds from the Plan. 

Withdrawals are permitted only to the extent the hardship cannot be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidating your assets (to the extent this would not itself cause severe financial hardship); or 3) by stopping deferrals under the Plan. Also, participants will not be allowed to request an unforeseeable emergency once a distribution has begun. Situations that may constitute unforeseeable circumstances include:

  • The imminent foreclosure of or eviction from the participant’s or beneficiary’s primary residence.
  • The need to pay for medical expenses, including non-refundable deductibles, as well as the cost of prescription drug medication.
  • The need to pay for the funeral expenses of a spouse or dependent (as defined by the IRS).
  • Only the amount reasonably necessary to meet the emergency need is available for withdrawal. 

Participants interested in applying for an Unforeseeable Emergency Withdrawal should contact Voya® to obtain the appropriate forms. Customer Services are available by calling the Voya® national Customer Service at (800)-584-6001.

Completed forms should be mailed to:
P.O. Box 990063
Hartford, CT 06199-0063

Voya does not offer legal or tax advice. Seek the advice of a tax attorney or of a tax advisor prior to making a tax-related insurance/investment decision.


  • Active participants are permitted to borrow from their deferred compensation plan account.
  • There are two types of loans available; general purpose and residential (used to acquire, construct, reconstruct or substantially rehabilitate the principal residence of the participant or family member)
  • Participants may only have one loan of each type outstanding under the Plan at any time.
  • Minimum loan amount for general purpose loans is $1,000, and for residential loans is $1,000.
  • The maximum loan amount is the lesser of: 1) $50,000 minus the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is taken, over the outstanding balance of loans on the date the loan is taken; or 2) 50% of your vested account balance.
  • You are able to view availability and payment options in your online account. Log In  to your account from the Home page of this site. If you need help logging on to your account, you call Customer Service or the local Voya® office.
  • Loan repayments (principal and interest) are made by payroll deduction on a biweekly basis. The maximum loan repayment period is five (5) years for general purpose loans and twenty (20) years for residential loans.
  • A one-time set up fee of $25 applies to each loan taken.
  • In the event of a loan default, the participant is not permitted to initiate another loan until the defaulted loan is repaid.
  • Married participants must obtain spousal consent in order to take a loan.
  • Loans payments start automatically and are made through payroll deduction.
  • Approximately two months following the distribution of the loan proceeds, the first loan repayment will be deducted from your paycheck
  • Loans may impact your withdrawal value and limit participation in future growth potential.
  • Upon separation from service you may continue to make loan payments directly to Voya® via ACH. If loan payments are not continued the loan will default and the loan balance will be reported as income on a 1099 in the year of the default.

To request a loan, please call the customer contact service center at (800) 584-6001 for a Loan Request package. Review, complete and sign the loan documents. The documents can be faxed or mailed back to Voya for processing. 


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 Partners 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.