Can I contribute both pre-tax and Roth contributions to the New Jersey State Employees Deferred Compensation Plan (NJSEDCP) and/or one of the Tax Deferred Annuity Programs (ABP, ACTS or SACT)?
Yes. You can choose to contribute pre-tax contributions, Roth contributions, or a combination of both.
Can I make Roth contributions to the NJSEDCP and/or one of the Tax Deferred Annuity programs (ABP, ACTS, or SACT) as well as to a Roth IRA?
Making Roth contributions to the Plan does not impact your eligibility to make Roth IRA contributions. Based on your income, however, you may not be able to contribute to a Roth IRA.
Can I roll my Roth IRA into the NJSEDCP?
No. The law does not allow Roth IRAs to be rolled into the Plan.
Do I need to set up another account to make Roth contributions?
No. You would only need to select an allocation percentage for your Roth contributions. You may do this by logging into your account at Empower NJSEDCP or by calling Empower at 866-657-3327. The contributions will be made to your existing NJSEDCP account.
If you are not currently participating in the NJSEDCP and would like to, please register at http://empower.com/njplans or download an enrollment form from this site. Registering online may require a plan enrollment code, which can be obtained from an Empower retirement plan counselor or by calling Empower at 866-657-3327 (request code for plan number 524954-01).
How do I keep track of my pre-tax and Roth contributions?
Roth contributions will be tracked separately both on your paycheck and in your account at Empower. Roth contributions will be listed as a separate ‘source’ of money on the participant website and on your quarterly statement.
How much can I contribute to the Plan if I make pre-tax and Roth contributions?
The IRS limit applies to the combined contribution amount. The limit is $23,000 for 2024. You may also be eligible to make catch-up contributions. If you are age 50 or over as of December 31, 2024, you can contribute an extra $7,500. Your Plan also offers a Special 457 Catch-up for participants who have not always maximized their annual contributions to the NJSEDCP.
What are Roth contributions? Are they different from traditional pre-tax contributions?
Roth contributions are voluntary contributions that are made on an after-tax basis. The amount you contribute is included in your W-2 in the year you make your contribution. Roth contributions and any earnings on those contributions are tax-free upon distribution, provided (1) you have reached the age of 59 ½ (2) your first Roth contribution was made at least five years prior (going back to January 1 of that year) and (3) you are no longer employed by Rutgers University.
Traditional contributions are made on a before–tax basis, reducing your taxes at the time you make the contribution. Traditional pre-tax contributions, and any earnings on those contributions, are subject to ordinary taxes upon distribution.
Deciding which contribution type is better for you is a personal decision as you can choose to contribute pre-tax contributions, Roth contributions, or a combination of both.
What is a 5-taxable-year period of participation? How is it calculated?
The 5-taxable-year period of participation begins on the first day of the calendar year in which you make your first Roth contribution to the Plan and ends when five consecutive calendar years have passed.
Where do I get more information about Roth Contributions?
For additional information visit Empower NJSEDCP. You may also call Empower at 866-657-3327 or the Rutgers OneSource Service Center at 732-745-SERV (7378).
You may also contact a dedicated NJ representative. Their contact information can be found at https://njplans.empower-retirement.com/participant/#/articles/NJRP/meetYourRepresentatives.