What is DCP?
The DeferredCompensation Program (DCP) is a supplemental savings program you control. The Washington State Department of Retirement Systems (DRS) administers these 457 plans, which is similar to a 401k or 403b that many employers offer.
With DCP, you can:
- Save more for retirement
- Choose your contribution amount
- Start or stop saving anytime
- Change investment options
- Manage your account online
Tax deferred
DCP is different from a regular savings plan because your contributions come from your pre-tax income. So, if you increase your savings by $100, your paycheck is only reduced about $85.
Do I need to know about investing?
Not at all. DCP gives you options. Have a fund managed for you by a professional team - with automatic rebalancing based on your retirement age. Or choose from a variety of additional investment options. You can also change your investment fund at any time.
Tight budget?
DCP savings starts as low as 1% per month (or $30). Contributions are automatically deducted from your paycheck making saving easier. You can change your contributions at any time. This includes starting, stopping, increasing or decreasing the amounts you contribute from your paycheck. It's never too early (or too late) to save with DCP! Get started today.
Check out the links below to learn about a great way to build your nest egg in addition to your Retirement plan.
DCP Extended Enrollment Form
DCP Quick Enrollment Form
Limits
Washington public employees have access to a 457(b) plan through DCP or similar 403(b) savings plan. Both plans allow you to contribute directly from your paycheck before taxes, lowering your tax liability for the year. In 2023, you can contribute, or defer, up to $22,500 from your salary under a section 403(b) plan. Having more than one account doesn't matter; this limit includes all 403(b) accounts. However, 457(b) contributions don't count against this limit, so you could contribute $22,500 in your 403(b) and an additional $22,500 in a 457(b). Having 403(b) and 457(b) plans is one way to defer more than $22,500 in 2023. The choice is yours!
These 2023 limits apply to all DCP participants:
Minimum monthly contribution limit: $30 or 1% of your earnings
Maximum annual contribution limit: $22,500
This annual maximum limit is equal to:
- $1,875 per month for 12 months for monthly payrolls
- $937 per 24 semi-monthly pay periods
- $865 per 26 bi-weekly pay periods
Catch-up options
Participants aged 50 and older: You’re allowed an additional $7,500, for a maximum limit of $30,000. This is equal to:
- $2,500 per month for 12 months for monthly payrolls
- $1,250 per 24 semi-monthly pay periods
- $1,153 per 26 bi-weekly pay periods
Special Catch-up limit: In addition to the limits above, a Special Catch-up limit of $45,000 could be available to those participants nearing retirement. To determine your eligibility, call DRS at 800-547-6657.
Special deferral limits: If you are under age 50 and want to defer over the monthly maximum of $1,875, or if you’re 50 or older and want to defer over the maximum of $2,500, contact us for a Special Deferral form: 800-547-6657.