Author Topic: Newbie-can anyone translate this 403 (B) jargon?  (Read 389 times)

mamaof4

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Newbie-can anyone translate this 403 (B) jargon?
« on: March 08, 2020, 02:19:54 PM »
I don't understand what this means because I'm a complete newb. I have google searched but it still isn't clear and I want to be sure I get it right.

NDPERS PEP incentive is a provision in the ND Public Employees Retirement system that allows members who participate in an approved deferred comp plan to receive up to 4% of salary credited to their member account in addition to the 7% employee contribution. This allocation is from the employer contribution received and earns interest monthly.

Thanks!

MDM

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Re: Newbie-can anyone translate this 403 (B) jargon?
« Reply #1 on: March 08, 2020, 05:06:09 PM »
[Some acronym] is a provision in the ND Public Employees Retirement system that allows members who participate in an approved deferred comp plan to receive up to 4% of salary credited to their member account in addition to the 7% employee contribution.
A "deferred comp[ensation] plan" is a 401k, 403b, 457b, etc.  Doesn't say how the "up to" amount is determined but is the rest understandable?

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This allocation is from the employer contribution received
This is muddy.  Perhaps the gist is that the "up to 4%" doesn't come out of your salary, but rather is an additional payment from your employer.

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and earns interest monthly.
That part seems straightforward enough, although "how much" interest would be good to know.

mamaof4

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Re: Newbie-can anyone translate this 403 (B) jargon?
« Reply #2 on: March 08, 2020, 08:07:02 PM »
Thanks for the response. I felt it was muddy as well but it's good to hear it wasn't just me!! This is a foreign language for me at this point, but I'll get there.

ericrugiero

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Re: Newbie-can anyone translate this 403 (B) jargon?
« Reply #3 on: March 09, 2020, 08:19:31 AM »
That is a little confusing. 

I think it means you put in 7% of your money and the employer puts in an additional 4% for you.  It's common for employers to match a certain percentage of 401K or 403B contributions. 

wellactually

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Re: Newbie-can anyone translate this 403 (B) jargon?
« Reply #4 on: March 09, 2020, 09:38:24 AM »
It sounds like you are required to contribute 7% to your NDPERS defined contribution plan. You also then have the option to contribute to deferred compensation, in this case 403(b). If you do that extra contribution, your employer will match it up to 4% of gross salary. That match from the employer will be deposited not into your 403(b) but into your defined contribution NDPERS plan.

wellactually

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Re: Newbie-can anyone translate this 403 (B) jargon?
« Reply #5 on: March 09, 2020, 12:09:06 PM »
Posting a second time...

Page 12 of this shows what you contribute to the NDPERS defined contribution plan and what your employer contributes: https://ndpers.nd.gov/image/cache/dc-plan-handbook.pdf

You have to contribute the 7%. The employer has to contribute a similar amount. Neither has anything to do with the match you are questioning.

The PEP is the Portability Enhancement Provision. It "allows you to 'vest' in the monthly employer contributions to the Defined Benefit Plan." But it requires that you be enrolled in one of the qualifying deferred compensation plans AND contribute to it. I still believe the 4% is how much of your salary they will match in contributions. You put that money into your deferred comp account and they match in your defined contribution account.

More info here: http://ndpers.nd.gov/i-want-to/add-pep-to-enhance-your-retirement/

My public employer does a similar thing. I contribute to a qualified 457 and they match that in a 401(a) up to 2% of my salary in addition to contributing to my pension.