457(b) Plan

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 Document, the Plan Document provisions prevail. For more information, please contact your local representative.


All employees are eligible to participate in the Plan and defer payment of part of his or her compensation by enrolling in the Plan, with the exception of rehire retirees.


Contributions under the Plan are made by participants through a bi-weekly deduction of their paycheck. Under the Plan, the minimum bi-weekly contribution is $25.00 and maximum is the IRS maximum annual contribution limit (or 100% of includible compensation, whichever is 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. The City’s 457 Plan also accepts rollovers from Individual Retirement Accounts (IRAs) as well.

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.

Required Minimum Distributions and Other Distribution Options Available

The City of San José’s 457 Deferred Compensation plan offers participants several distribution and withdrawal options based upon your status within the Plan. These distribution options fall into two categories:

  • Required Minimum Distributions (RMDs); available to retired participants after attaining the age of 73.
  • Other Distribution Options

The following information outlines each of these options and the steps required to take advantage of these options as well.

Required Minimum Distributions (RMDs)

The IRS requires that distributions under a 457(b) plan begin when you attain age 73 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 distributions (RMD). Retirement and severance from employment are both distributable events and participants can request a distribution after 30 days of the event. 

Other Distributions Options

The City of San José’s 457 Deferred Compensation plan also offers participants access to their account balances prior to age 73 for separated employees under either a full or partial account distribution. 

Access to your account balance may be possible through the following options:

  • In-Service Distributions
  • Birth/Adoption Withdrawals
  • Unforeseen Emergency Withdrawals
  • Loans
  • Full or Partial Account Distributions

Details for each of these options is provided below.

In-Service Distributions

The Plan also allows for In-Service Distributions in accordance with the SECURE Act of 2019. The SECURE Act permits plan participants to take an in-service distribution at age 59½ for governmental 457(b) plans.  The availability of this distribution only applies to the City of San José’s 457 governmental deferred compensation plan. Please contact one of Voya’s representatives or Voya’s Customer Service Center at (800)-584-6001 to process such distributions.

Birth and Adoption Withdrawals

The Plan also allows for Birth and Adoption Withdrawals in accordance with the SECURE Act of 2019. The SECURE Act permits plan participants to take a withdrawal of up to $5,000 per birth or adoption from certain employer-sponsored plans for the birth or adoption of the participant’s child for the 1-year period following the birth or adoption. The adopted child must be less than 18 years old, or physically or mentally incapable of self-support.

Additionally, qualified adoption distributions would not include the adoption of a child of the taxpayer’s spouse. These withdrawals are not be subject to the IRS 10% premature distribution penalty tax, federal 20% mandatory withholding, or the Special Tax Notice, and direct roll over rules applicable to retirement plans. The withdrawal may be repaid to the plan if desired. The availability of this distribution only applies to the City of San José’s 457 governmental deferred compensation plan. 

Please note that Voya will require documentation to verify the birth or adoption of your child to process these withdrawals.  Please contact one of Voya’s representatives or Voya’s Customer Service Center at (800)-584-6001 to process such distributions.

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’s Customer Service Center 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 Voya’s Customer 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.

Full or Partial Account Distributions

With the exception of the in-service distribution options listed above, distributions are allowed only upon your separation from service or death.

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.

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)

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 73 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. 


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 Voya’s Customer Service Center at (800)-584-6001.

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.

Status Changes

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’s Customer Service Center at (800)-584-6001 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.


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.