The South Carolina Deferred Compensation Investment Account Plan is a retirement savings program designed specifically for South Carolina state and local government employees. It enables participants to set aside a portion of their salary before taxes, allowing for tax-deferred growth of their investments until retirement. The program offers multiple investment options tailored to suit individual risk tolerance and financial goals. The South Carolina Deferred Compensation Investment Account Plan is an excellent way for employees to supplement their pension or Social Security benefits, ensuring a more secure financial future. By participating in the plan, employees have the opportunity to accumulate savings over time, taking advantage of tax benefits and potential investment growth. South Carolina offers different types of investment options within its Deferred Compensation Investment Account Plan. These options include: 1. Fixed Income Funds: These funds are invested in bonds and other fixed-income securities with low volatility. They provide stable and predictable income streams, making them suitable for conservative investors who prioritize capital preservation. 2. Equity Funds: Equity funds invest in stocks and other equity securities, offering the potential for higher returns over the long term. These funds are suited for participants with a higher risk appetite who seek growth and are willing to tolerate market fluctuations. 3. Target Date Funds: Target date funds are a popular option for participants who prefer a hands-off approach to investing. These funds automatically adjust the asset allocation mix based on the target retirement date. As the retirement date approaches, the fund gradually shifts towards a more conservative investment strategy. 4. Money Market Funds: Money market funds aim to provide stability, liquidity, and preserve capital. They invest in short-term, high-quality fixed-income securities, such as Treasury bills and commercial paper. These funds are ideal for participants with short-term savings goals or a low tolerance for risk. 5. Self-Directed Brokerage Account: For experienced investors who want more control over their investment choices, the plan also offers a self-directed brokerage account. This allows participants to invest in a wide range of stocks, bonds, mutual funds, and exchange-traded funds. Participants can choose one or a combination of these investment options to create a diversified portfolio aligned with their financial objectives. The plan provides access to educational resources, personalized counseling, and online tools to assist participants in making informed investment decisions. The South Carolina Deferred Compensation Investment Account Plan provides a valuable opportunity for state and local government employees to save for retirement while enjoying potential tax advantages and a range of investment options. By participating in the plan and actively managing their investments, participants can work towards a financially secure retirement.
South Carolina Deferred Compensation Investment Account Plan
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How to fill out Deferred Compensation Investment Account Plan?
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A deferred compensation plan withholds a portion of an employee's pay until a specified date, usually retirement. The lump sum owed to an employee in this type of plan is paid out on that date. Examples of deferred compensation plans include pensions, 401(k) retirement plans, and employee stock options.
Note: Your deferred compensation is not placed directly into an investment, but you designate investment choices for bookkeeping purposes. Your employer uses your choices as a benchmark to calculate the appropriate investment returns owed during the deferral period.
The South Carolina Deferred Compensation Program (Program) is a voluntary program that gives you a tool to save and invest extra money for retirement through before-tax and after-tax contributions.
You can request a loan by logging in to your DCP account, completing a Loan Application Form, or calling the Service Center at 844-523-2457.
If people are not comfortable leaving deferred compensation in the hands of their employer, pre-retirement distributions allow them to protect their money by withdrawing it from the plan, paying tax on it, and investing it elsewhere.
One potential exception is performance based compensation (PBC). If a deferral qualifies as PBC under Section 409A rules, deferral elections can be changed or cancelled as long as that change occurs with at least six months remaining in the performance period.
The Bottom Line. If you have a qualified plan and have passed the vesting period, your deferred compensation is yours, even if you quit with no notice on very bad terms. If you have a non-qualified plan, you may have to forfeit all of your deferred compensation by quitting depending on your plan's specific terms.
You can take out small or large sums anytime, or you can set up automatic, periodic payments. If your plan allows it, you may be able to have direct deposit which allows for fast transfer of funds. Unlike a check, direct deposit typically doesn't include a hold on the funds from your account.