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A Plan Comparison: 401(k) vs. 457(b)
When it comes to investing in a retirement plan, people have different needs and wants. That’s why
the South Carolina Deferred Compensation Program (Program) offers two plans from which to choose.
As you review your options, think about your long-term retirement goals. When do you plan to take a
distribution? Will you need to purchase service credit? Are you interested in a “catch-up” option? Then
select the plan that best suits your particular needs.
PROVISION
401(k)
457(b)
Maximum contribution of $18,000 per year (up to age 50)1
X
X
In-service distributions2 allowed at age 59½
X
No 10% premature penalty on distributions2 prior to age 59½ after
separation from service from a participating employer
X
Pre-tax contributions
X
X
After-tax (Roth) contributions
X
X
X
Special 457(b) Catch-Up3
Age 50+ Catch-Up2 ($6,000)
X
Rollovers allowed from other qualified plans, including the TERI4
plan, State ORP and non-Roth IRAs5
X
X
X
Rollovers only from other 457 plans5
In-service transfers to purchase service credit
X
X
Loans
X
X
Saver’s Tax Credit qualification
X
X
Financial hardship withdrawals2
X
Unforeseeable emergency withdrawals2
X
There may be additional differences between the plans. To discuss the differences and which plan
might be best for you, contact your local Retirement Plan counselor at (877) 457-6263. For more
information about each plan, refer to the Program Features and Highlights or the Plan Document
for each plan, or visit the Program website at www.southcarolinadcp.com.6
1 In 2015, if you are under age 50 you may contribute $18,000 to each plan, for a total of $36,000.
2 Withdrawals may be subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% early withdrawal penalty. The 10%
early withdrawal penalty does not apply to 457 plan withdrawals.
3 You may not use the Special 457(b) Catch-Up provision and the Age 50+ Catch-Up provision in the same year.
4 Teacher and Employee Retention Incentive Program.
5 You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees
and/or limitation of investment options.
6 Access to the voice response system and/or website may be limited or unavailable during periods of peak demand, market volatility, systems
upgrades/maintenance or other reasons.
Core securities, when offered, are offered through GWFS Equities, Inc. and/or other broker dealers.
GWFS Equities, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. Representatives
of GWFS Equities, Inc. are not registered investment advisors and cannot offer financial, legal or tax advice. Please consult with your financial
planner, attorney and/or tax advisor as needed. All trademarks, logos, service marks, and design elements used are owned by their respective
owners and are used by permission. ©2015 Great-West Life & Annuity Insurance Company. All rights reserved.
Form# CB1121PC (01/2015) PT216418