Contribution & Future Allocations

2021 Annual Maximum Contribution Limits

Participant Age

Maximum Limit

Under Age 50

$19,500

Age 50 & Over

$26,000

Catch-Up Provision*

$39,000


Each calendar year, the IRS modifies the annual contribution limits based on cost-of-living adjustments. The IRS announces annual increases toward the end of each calendar year as specific cost-of-living benchmarks are known.

* See next question for more information about the Catch-Up Provision.

If you are age 50 or older, you may contribute an additional $6,500, for a total of $26,000 in 2021.

In addition, a Catch-Up provision allows you to make up for under-used deferrals by allowing twice the normal limit for the three consecutive calendar years prior to your normal retirement age. Normal retirement age is generally the age at which you are eligible to collect a full pension benefit. You cannot combine the Catch-Up provision with the age 50 and over contribution limit. For more information, or to request the Catch-Up Rules and Election brochure, call a MSRS Representative at 800-657-5757, option 3.

Changing the amount you contribute to your MNDCP account per pay period just got easier. Instead of completing a form, you have the following options to change your contribution amount.
 

State of Minnesota Employees:

  1. Select Other Payroll
  2. Select Input Deferred Cmp/TSA Deductn under the Savings Plans tab
  3. Click Add Savings Plan
  4. Make change and click Save
  • Contact an MSRS Representative2 at 800-657-5757, option 3

 

Other Minnesota Public Employees:

  • Login to your account online.1  Select Go to Savings Plans to view your MNDCP account information.
  1.  Under Paycheck Contributions on the left navigation menu, select Change Paycheck Contribution
  • Contact an MSRS Representative2 at 800-657-5757, option 3

 

Hennepin County Employees:

  • Login to APEX and make the changes under the Benefits tile > Deferred Compensation > Enroll/Change Deferred Comp

 

Note regarding lump-sum deferrals:
If you are a non-state employee and wish to contribute a lump sum amount of the following examples of pay, please contact your Human Resources/Payroll Representative. The normal contribution amount MNDCP keeps on file is intended for the ongoing amount per pay period that is being deducted from your paycheck. It is not intended for one-time contributions.

  • Severance (sick or vacation)
  • Overtime payments
  • Retro pay
  • Achievement awards
  • PTO (paid time off) pay
  • Any one-time change in your deferral amount

 

1 Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.
2 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.

 

Your employer or bargaining unit may match a portion of the dollars you contribute to your account. Matching dollars are applied to your account dollar-for-dollar, per fiscal year. Once you reach the matching limit, your employer will no longer contribute matching dollars until the next fiscal year. The annual contribution limits take into account employer matching contributions. Contact your employer or bargaining unit to determine if they offer any matching dollars to your MNDCP account.

Yes. You may be eligible for an income tax credit of up to $1,000 ($2,000 if married filing jointly) just by contributing to your MNDCP account. It's called the Saver's Tax Credit.

The amount of the credit is determined by your filing status, your adjusted gross income (AGI), and contributions to a qualifying retirement plan, like your MNDCP account. You may not take the credit if, during 2020, you were under age 18, or were a full-time student, or claimed as a dependent on someone else's 2020 tax return.
 

Use the chart below to determine the percentage of the allowable credit for 2020.

AGI
Married Filing Jointly

AGI
Head-of-Household

AGI
Single

Percent Credit

$0 - $39,000

$0 - $29,250

$0 - $19,500

50% on first $2,000

$39,001 - $42,500

$29,251 - $31,875

$19,501 - $21,250

20% on first $2,000

$42,501 - $65,000

$31,876 - $48,750

$21,251 - $32,500

10% on first $2,000

$65,001 & over

$48,751 & over

$32,501 & over

0%

 

If you qualify, complete IRS Form 8880 and attach it to your federal tax return. Form 8880 includes instructions to calculate the credit correctly. IRS publications and tax forms can be downloaded at http://www.irs.gov.

There are three ways to change your future fund allocations:

  1. Login to your account online1 Select Go to Savings Plans, then under Investments in the left navigation menu, select View/Manage my Investments
  2. Call the Automated Voice Response System1 at 800-657-5757, option 2: or
  3. Contact an MSRS Representative2 at 800-657-5757, option 3
     

1Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.
2Representatives 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

Transfer Procedures, Trading Restrictions, & Plan Fees

There are two types of fees:

Administrative fee - This annual fee, which is used to pay for recordkeeping, communication, customer service and other services provided, is 0.10% (or one-tenth of 1%) capped on the first $125,000 account balance. The maximum annual fee you will pay is $125. The administrative fee is deducted from your account each month and is reflected on your quarterly statement.

Example: If you had a balance of $25,000 at the end of the month, your Administrative fee for that month would be $2.08 ($25,000 x .00010 ÷ 12 months)

Operating expenses - Each investment option has an investment management fee (known as an expense ratio) that varies by investment option. These fees pay for trading and management expenses of the investment provider. The fee is deducted from each investment option's management company (not MNDCP) before the daily price per share or calculation of the fund's performance return.

All fees are disclosed on the Performance Report Sheet (pdf) that is included in your quarterly statement and updated monthly under the Investments tab on this website.

The following investment options have restrictions and/or fees:


Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information you may obtain mutual fund prospectuses and disclosure documents from your registered representative. For prospectuses related to investments in your Self-Directed Brokerage (SDB) account, contact TD Ameritrade at 1-866-766-4015. Read them carefully before investing.

Transfer requests initiated prior to 3:00 PM Central Time will be processed at the close of the financial markets on that business day. Transfer requests initiated after 3:00 PM Central Time or on non-business days will be processed at the close of the financial markets on the next business day.

You can adjust the mix of investments in your MNDCP account at any time. Regularly reviewing your asset allocation strategy and investment options is a good idea. The MNDCP does not charge any account maintenance or trading fees; however, funds may impose their own redemption fees on certain transfers or withdrawals held for less than the required period.

To initiate a transfer, call an MSRS Representative1 at 1-800-657-5757, option 3
or
Login to your account online- Select Go to Savings Plans, then under Investments in the left navigation menu, select View/Manage my Investments
 

1Representatives 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.
2Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.

A Self-Directed Brokerage Account, offered through TD Ameritrade, allows you the opportunity to select from numerous mutual fund options. MNDCP will assess an additional annual administrative fee of $30 for the use of this service.

The minimum transfer amount from an MNDCP account to TD Ameritrade is $500. You must also maintain a minimum balance of $500 in your MNDCP core funds. Payroll deductions may not be invested directly to the Self-Directed Brokerage Account nor can distributions be taken directly from the Self-Directed Brokerage Account. For more information on the mutual fund options available through TD Ameritrade, please call TD Ameritrade directly at 1-866-766-4015.
 

Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC/NFA.
TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and the Toronto-Dominion Bank. Used with permission.
Additional information can be obtained by calling TD Ameritrade at 1-866-766-4015. TD Ameritrade and GWFS Equities, Inc. are separate and unaffiliated.

Withdrawals

You are eligible to withdraw money from your account 30 days after you terminate from employment (at any age) or at any age after age 59½, regardless of employment status. Your designated beneficiary(ies) can initiate a withdrawal after your death.

You will need to complete a Distribution Request form. Please contact MSRS at 800-657-5757, option 3 to obtain this form (the form is not available on this website).

You may also request a withdrawal online at any time once you Login to your account online.1 Select Go to Savings Plans, then select Withdrawal Request from the left navigation menu.

Please note: Only the participant may request the form. We cannot accept a request from any other party including a spouse, family member, or personal financial representative.

1Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.

Generally, you can only access your account assets when you terminate employment with the employer sponsoring the MNDCP, however, there are five types of withdrawals you may request while still employed:

  1. Age 59½ Withdrawal - Once you reach age 59½, you are eligible to take a withdrawal from your MNDCP account regardless of your employment status. You may request a withdrawal online at any time once you Login to your account online.1 Select Go to Savings Plans, then select Withdrawal Request from the left navigation menu. Or, contact us to request an In-Service Withdrawal Request form.
     
  2. Unforeseeable Emergency Withdrawal - If you suffer an unforeseen emergency resulting in severe financial hardship that cannot be satisfied by any other source, you may apply for a withdrawal. Contact Us  to obtain the necessary application.
     
  3. Purchase of your public employment service credit - You may be eligible to transfer pre-tax assets from your MNDCP account to your governmental defined benefit pension plan to purchase permissible service credits. For additional information, Contact Us.
     
  4. De Minimis Withdrawal- You may be eligible to withdraw your entire account balance while still employed if all of the following criteria are met:
    ​​​
    1. Your MNDCP account balance is $5,000 or less, and
    2. You have not contributed to your MNDCP account for the past two years, and
    3. You have not previously taken a De Minimis distribution.
       
  5. Qualified Rollover Withdrawal- You are eligible to withdraw any portion of your account balance that represents assets that were rolled into your MNDCP account from another qualified retirement plan or IRA.

If you made pre-tax contributions to your MNDCP account, you "defer" taxes until such time when you withdraw your balance. Therefore, any withdrawals are includible in gross income for both federal and state income tax purposes and are taxed as ordinary income in the year the withdrawal is made. MNDCP is required by law to withhold 20% federal income tax. State income tax is only withheld if your resident state mandates income tax withholding (Minnesota does not) or if you indicate your preferred withholding on the distribution form.

If you made Roth after-tax contributions to your MNDCP account, you paid income tax at the time they were contributed; therefore, withdrawals from your MNDCP Roth account are completely tax-free as long as you meet the following conditions.


AND the withdrawal is either made:

  • after attainment of age 59½, or
  • to a designated beneficiary after your death, or
  • in the event of disability.

Any withdrawal taken from your MNDCP Roth balance before the end of the 5-taxable-year period or prior to age 59½ is considered a nonqualified Roth withdrawal, negating the tax-free benefit of the associated earnings. The earnings only portion of the nonqualified Roth withdrawal will be reported as taxable and subject to 20% mandatory federal income tax withholding. However, the contribution portion of the nonqualified Roth withdrawal is not taxable.

Neither MSRS nor any of its representatives are able to provide legal or tax advice.

If you have retired or separated from service with a participating employer, you must begin receiving payments no later than April 1 following the calendar year in which you turn age 72 and then by the end of every calendar year thereafter. This is called your Required Minimum Distribution (RMD). However, if you turned age 70½ prior to December 31, 2019 (born prior to July 1, 1949), then you must take your RMD for 2019 and every year thereafter.

Each fall, MSRS will mail you a reminder notice regarding your RMD payment.

To start your RMD, contact MSRS at 800-657-5757, option 3 to obtain the Required Minimum Distribution Request form.

The RMD brochure (pdf) explains how your RMD amount is calculated each year.

Rollovers

MNDCP accepts assets from other retirement plan accounts. You may roll money from the following types of plans into your MNDCP:


You may not roll after-tax assets from a Roth IRA into your MNDCP account.

To initiate an incoming rollover, complete and return the Incoming Direct Rollover form (pdf) or call MSRS at 800-657-5757, option 3 to request the form. You'll also want to contact your previous plan provider to confirm that those assets are eligible for rollover and ask about their paperwork requirements.
 

Carefully compare your options for differences in cost, benefits, charges and any other important features before you rollover assets. You may want to consult your legal or tax advisor

You are eligible to rollover your MNDCP account balance to another qualified retirement plan 30 days after you retire or terminate from employment. Qualified retirement plans include:


To initiate a rollover you must complete a Distribution/Direct Rollover Request form, which can be obtained by calling MSRS at 800-657-5757, option 3 (the form is not available on this website).

Please note: Only the participant may request the form. We cannot accept a request from any other party including a spouse, family member, or personal financial representative.

Carefully compare your options for differences in cost, benefits, charges and any other important features before you rollover assets. You may want to consult your legal or tax advisor

No. You will not be taxed or penalized for rolling assets between qualified retirement plan accounts. You only pay taxes when you take a distribution from the account.

Exception: Since Roth IRA accounts are funded with after-tax dollars, you will be required to pay taxes on the pre-tax portion of your MNDCP account that you rollover to a Roth IRA.

Miscellaneous Account Changes

There are two ways to change a beneficiary designation:

  1. Login to your account account1 - Select Go to Savings Plans; then select Beneficiaries under Account Information in the left navigation menu.
  2. Complete and return the Beneficiary form (pdf) or call MSRS at 800-657-5757, option 3 to request the form.

 

1Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.

Address changes may be requested:

  1. Contact MSRS at 800-657-5757, option 3
  2. Complete and return the Personal Information Change Request form (pdf) or call MSRS to request the form.
  3. Login to your account online1 - select Address under the My Profile tab.

Please note: An address change may only be requested by the participant or someone who has Power of Attorney (as long as we have appropriate documentation on file). Only the participant may change their address. We cannot accept a change from any other party including a spouse, family member, or personal financial representative.
 

1Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.

Complete and return the Personal Information Change Request form (pdf) or call MSRS at 800-657-5757, option 3 to request the form.

A photocopy of the marriage certificate or entire divorce decree must be provided with the form.

Contact MSRS at 800-657-5757, option 3 to request changes to your installment including the payment amount, the payout date, the tax withholding amount, or to stop your installment.

If your installment is automatically deposited into your bank account and you've changed banks or banking information, complete and return the Direct Deposit Agreement form (pdf) with your updated banking information.