Minnesota Deferred Compensation Plan Overview
About the Plan
The Minnesota Deferred Compensation Plan (MNDCP) is a voluntary savings plan intended for long-term investing for retirement. Authorized under Section 457 of the Internal Revenue Code, the MNDCP is a smart and easy way to supplement retirement income from your Minnesota public pension and Social Security benefits.
Available to any full-time, part-time, or temporary Minnesota public employee (state, city, county, township, school district, etc.), the MNDCP allows you to build retirement savings through automatic payroll deductions - you control how your money is invested.
You are eligible to withdraw savings from your MNDCP account at any age upon retirement, termination of employment, or disability. If you are still employed, you are eligible to withdraw your MNDCP savings anytime after age 59½. Upon your death your designated beneficiary(ies) can withdraw funds.
Why Choose MNDCP?
Take advantage of the competitive fees that result from MNDCP's economies of scale. This allows more of your money the potential for growth.
No Commissions or Sales Charges
The administrators of MNDCP are public employees, just like you, and receive no financial incentives for increased participation.
Some employers or bargaining units match a portion of your contributions. Ask your employer if they offer matching contributions.
Low Minimum Contributions
Contribute as little as $10 each paycheck.
It's Your Money
All account assets are held in trust for your exclusive benefit. Your account assets are never subject to the claims of creditors in the event of the State or public employer's bankruptcy.
No IRS Early Withdrawal Tax Penalty
One advantage the MNDCP has over other types of plans (i.e., 401(k), 403(b), 401(a), or IRA's) is that your withdrawals are not subject to the IRS 10% tax penalty usually assessed on withdrawals made before age 59½.