Employees of the Chittenden Central Supervisory Union school districts now have an exceptional opportunity to choose between two excellent retirement plans: The CCSU Tax-Deferred Annuity Plan (403(b) Plan) and the State of Vermont 457 Deferred Compensation Plan (457(b) Plan).  Employees also have the unique opportunity to contribute to both plans if the situation suits them.

How does the 457(b) Plan differ from the 403(b) Plan?

Both the 403(b) Plan and the 457(b) Plan allow employees to save for their retirement by saving and investing pre-tax dollars through voluntary deferrals (i.e. payroll deductions).  Similarly, both the contributions and any earnings under the plans are tax-deferred until the money is withdrawn, usually at retirement when individuals tend to fall into a lower tax bracket. When the funds are withdrawn, they are subject to regular income tax.

Aside from the investment options that differ between the plans (see below), one of the primary differences between the 403(b) Plan and the 457(b) Plan is that under the 403(b) Plan, withdrawals can be subject to a 10% tax penalty if withdrawn prior to age 59 1/2.  This 10% federal tax penalty does not apply to distributions from a 457(b) Plan prior to the age of 59 1/2.  Please read the 457(b) Plan Highlights and the 403(b) Summary Plan Description for more information.

What Investment Options are available under the 457(b) Plan?

The 457(b) Plan currently offers the same T.Rowe Price Profile Funds that are available under the 403(b) Plan. However, many of the International, Small Cap, Mid Cap, Large Cap, Balanced and Bond Funds offerings differ between the plans.  For more information about the investment options available under the 457(b) Plan, please click here.

What is the maximum amount I can contribute?

Maximum contributions cannot exceed 100% of includible compensation

Maximum contributions cannot exceed 100% of includible compensation

How do I enroll?

To enroll, employees need to complete a Salary Reduction Agreement (indicating the amount of their contribution) and an Participant Enrollment form (indicating your investment choices).  On the Participant Enrollment form under Payroll Information, please indicate one of the following for Division Name and Division Number based on your employing district:

If you have more than one Primary Beneficiary or one Contingent Beneficiary, please also complete a Beneficiary Designation form.  The completed forms should be submitted to the Payroll Department at the central office at the address below:

Chittenden Central Supervisory Union

Attn: Payroll Office

51 Park Street

Essex Jct., VT 05452

Additional Resources:

• 457bwise

Last updated: Nov 4 at 9:07 am