The Deferred Compensation Plan

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Plan News

New for 2026 - Roth Only Catch-Up Contributions Permitted for Participants Whose Wages Exceeded $150,000 in 2025

As a result of federal tax law changes within SECURE Act 2.0, beginning in 2026, if you are age 50 or older and earned greater than $150,000 in FICA wages (Box 3 on Form W-2) in 2025, you can only make age based (Age 50+ or Ages 60-63) catch-up contributions to your 457 or 401(k) plan on a Roth (after-tax) basis. Therefore, your pre-tax goal amount will remain at $24,500 for 2026, even if you are age 50 or older, and your pre-tax contributions to the 457 Plan and the 401(k) Plan will stop after reaching the goal amount of $24,500.

To change your deferral to a Roth contribution so that you can continue to contribute up to the age 50+ or ages 60-63 catch-up contribution amount, you will need to access your account online.  Select the account, either 457 or 401(k), and choose the Contributions & Savings tab and select Manage Contributions. Once you select Update My Contributions, you will be asked to enter a Roth deferral percentage. Enter the percentage amount you wish to contribute up to the age 50+ or ages 60-63 catch up allowable amount. Keep in mind that unlike pre-tax contributions, Roth contributions do not reduce your taxable income. 

If you are already making Roth contributions to the 457 Plan or the 401(k) Plan, you do not need to do anything. Your Age Based Catch-up (Age 50+ or Ages 60-63) contributions will continue up to the higher maximum goal amount. 

Important: You will need to review your pre-tax and Roth deferral percentages at the end of every calendar year and make changes, as needed, to ensure that you can contribute the desired regular and age-based maximum contribution limits. 

The Plan will provide additional communications and reminders to participants who will be affected by this new rule.  

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Annual Contribution limit increases in 2026.  Read more about the annual limit amounts.

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General Information

The New York City Deferred Compensation Plan (DCP) allows eligible New York City employees a way to save for retirement through convenient payroll deductions. DCP is comprised of two programs: a 457 Plan and a 401(k) Plan, both of which offer pre-tax and Roth (after-tax) options.

For employees enrolled in a City pension plan or the Voluntary Defined Contribution (VDC) Program, and for non-pension member employees who are contributing less than 7.5% to either the 457 Plan or the 401(k), DCP is a supplemental savings plan to Social Security.

For non-pension member employees who elect to contribute 7.5% or more to the Deferred Compensation Plan, DCP is their sole retirement plan in lieu of Social Security. Important Note: An employee participating in DCP in lieu of FICA and participating in the Health Benefits Buy-Out Waiver Program (taxable income) or has enrolled a domestic partner as a dependent in the City’s Health Benefits Program (imputed income), may need to increase his/her salary deferral percentage to an amount higher than 7.5% of annual salary in order to account for the increase in income. If the 7.5% of total salary income requirement is not met, the participant who is enrolled in DCP may be subject to FICA taxes.

To learn more about this, play our DCP in Lieu of FICA Video.