The City of San Jose’s Deferred Compensation Plan is a governmental deferred compensation plan defined by Section 457(b) of the Internal Revenue Code, commonly called a 457 deferred compensation plan. Deferred compensation plans allow employees to supplement any existing retirement or pension benefits with two deferral methods: a Pre-tax option and a Roth after-tax option. With the pre-tax option, money is deducted from the employee’s paycheck before taxes are taken out (reducing taxable income) and is invested for the employee, per their direction, through the deferred compensation enrollment process. With the Roth after-tax option, money is deducted from the employee’s paycheck after taxes are taken out (no taxes need to be paid when money is withdrawn if criteria are met). All City employees are eligible to participate. Deferred Compensation is a voluntary benefit that provides a convenient way for City employees to save money for retirement.
The City of San Jose also provides a separate plan to Part Time, Temporary or Contract Employees called the PTC Plan. You and the City of San Jose are required to contribute to the PTC 457 as long as you are not covered by one of the City of San Jose's Retirement Systems, (Federated or Police and Fire) per Federal regulations. You are required to contribute 3.75% of gross earnings for each pay period you work. The City of San Jose also contributes a matching amount of 3.75 % into the plan on your behalf.