Overview

The City of Phoenix is committed to supporting your financial well-being – today and tomorrow. The City’s retirement plans help you prepare for retirement by offering an easy, tax-advantaged way to save for your future financial needs.

Manage

Manage your account(s)

Visit the Nationwide website to enroll or manage your retirement plan account(s):

  • Enroll in the plan(s).
  • Check your balance.
  • Change your contribution rate.
  • Manage your investments.
  • Update your beneficiary.
  • Use planning tools and calculators.
  • Access forms and documents.
iconAm I eligible? What if I don’t enroll?

As a City of Phoenix employee, you are automatically enrolled in a Nationwide 457 account and 401(a) account shortly after your hire date. If you choose to enroll in a City employee medical plan with deductions taken from your paycheck, you are also automatically enrolled in the Post-Employment Health Plan (PEHP).

  • You have 90 days from your date of hire to make an irrevocable contribution decision to the 401(a) plan. This is the only contribution opportunity you will have for this plan.
  • The City will contribute an amount to your 401(a) plan that depends on your benefit category – this is based on the bargaining group that represents you.
  • The City does not contribute to the 457 plan or the Roth 457 plan, but you may contribute to either or both at any time.
  • The City contributes $150 per month to your PEHP account while you are enrolled in a City employee medical plan with deductions taken from your paycheck.

The 401(a) and the 457 accounts automatically invest your contributions in the Target Date Fund that most closely matches your retirement date, based on an assumed retirement age of 65. You may change your investment elections at any time. Visit the Nationwide website or call (602) 266-2733.

401(a)

The City automatically makes contributions into your 401(a) based on a negotiated percentage of your pay, depending on your benefit category. View contribution percentages in the table below. Percentages are renegotiated every three years.

  • You can make an irrevocable (cannot be changed or stopped at ANY time while employed by the City) percentage contribution to your 401(a) within the first 31 days of your hire.
  • You have a variety of investment options and can make changes at any time (an American Funds Target Retirement Date Fund is the current default option).
  • Loans and/or emergency withdrawals are not allowed.
  • Payment for unused sick time automatically gets contributed into your 401(a) at retirement.
  • A 10% early withdrawal penalty prior to age 59.5 may apply.
Benefit Category City Contribution
7/1/2019
001 0.45%
002 3.62%
003 0.10%
004 2.56%
005 4.42%
006 0.05%
007 6.23%
008 1.28%
009, 010, 011, 016, 017, 018, 019 8.50%

Traditional 457

The City also offers a 457(b) retirement plan. Key features of this plan include:

  • You can start, stop, and change contributions by dollar amount OR percentage (minimum contribution is $5.00 or 1% of pay) at *any* time while employed.
  • Contributions are pre-tax, so your paycheck impact is less and your taxable income is reduced.
  • You have a variety of investment options and can make changes at any time (an American Funds Target Retirement Date Fund is the current default option).
  • Loans and/or emergency withdrawals ARE allowed (subject to approval).
  • Once you terminate employment, you have full access to your funds and are NOT subject to a 10% early withdrawal penalty if you are under age 59.5; however, withdrawals ARE taxable as income (public safety officers may be eligible to withdraw up to $3,000 annually tax-free for accident, health, or long-term care insurance premiums).

Roth 457

The City also offers a Roth 457(b) plan. With a Roth 457(b), you pay taxes upfront when you make contributions into the plan. Then your money grows tax-free and you'll also enjoy tax-free withdrawals – as long as:

  • You're at least 59½, and
  • You do not take withdrawals from your Roth account for at least 5 years after making your first contribution to the plan.

You can choose to allocate part or all of your salary deferral to the Roth, or all or part of your salary deferral to your traditional 457(b) pre-tax account.

A Roth 457(b) might be right for you if you:

  • Think that taxes will increase before you retire, and you want to take advantage of potential tax-free withdrawals
  • Expect to be in a higher tax bracket when you retire
  • Are younger, and still have many years until retirement.

Take a few minutes to learn what’s the difference between the traditional 457 plan and the new Roth 457.

iconCatch up!

It's not too late to make up for lost time. If you'll be 50 or older this year, take advantage of the opportunity to contribute up to an additional $6,000 in 2019.

Pre-tax vs. Roth after-tax contributions

The City of Phoenix 457(b) plan gives you the flexibility to save for retirement in a variety of ways. You can make pre-tax contributions, Roth after-tax contributions, or a combination of both.

Pre-Tax Contributions Roth After-Tax Contributions
  • The money goes into your plan account before taxes are deducted, so you keep more of your take-home pay.
  • Because you don't pay taxes at the time you contribute, you'll owe taxes on both your contributions and any investment earnings when you withdraw your money in retirement (when you may be in a lower income tax bracket).
  • The money goes into your plan account after taxes are withheld.
  • In exchange for paying taxes now, both your contributions AND any earnings can be withdrawn tax-free in retirement, provided you meet two requirements for earnings:
    • At least five years have elapsed since your first Roth contribution.
    • You are at least age 59½ or the withdrawal follows death or total disability.
iconRemember to designate your beneficiaries

It's important to designate a beneficiary to receive the value of your retirement accounts in the event you die before beginning to receive your benefit. As personal circumstances change, be sure to keep that information up-to-date. Visit the Nationwide website to add or change a beneficiary.

PEHP

As a City of Phoenix employee, you may have a Post-Employment Health Plan (PEHP) in which money is set aside to reimburse you, tax-free, for qualified out-of-pocket medical expenses once you’re no longer employed. Your spouse and dependents may also be eligible for reimbursement.

You’re already enrolled in the PEHP if:

  • You were hired on or after August 1, 2007, OR
  • Your City service credit indicated that you had 15 or more years to retirement as of August 1, 2007.

AND

  • Have paid or are currently paying for City medical insurance premiums through your paycheck.

The City contributes $150 into your account with the second paycheck of every month – employee contributions are NOT allowed. The PEHP offers a variety of investment options that you can invest in for potentially higher growth (Nationwide Investor Destination Moderate Fund is the default option).

Visit PhoenixDCP.com to register for educational workshops, learn more about investment options, and access helpful planning tools.

Withdrawals and Loans

The money in your account is intended as a long-term investment to help you prepare for your financial needs in retirement. However, under certain circumstances, you may be able to access money from your account before reaching retirement age. For more information, visit the Nationwide website or call (602) 266-2733.

iconThink before you act

If you're considering taking a withdrawal or loan from your plan account, be sure to think about the impact it may have on your financial future:

  • Taking money from your account now may lead to a smaller savings balance when you retire.
  • Not only are you taking money away from your retirement savings, but the burden of repaying the loan may make it even harder to get back on track.
  • If you take a plan loan, you'll also lose more money to taxes because the interest payments on your loan are made with money that has already been taxed, and it will be taxed again when withdrawn from your account.
  • If you withdraw pre-tax money from your plan account, in addition to paying current taxes on the money, you may have to pay an additional 10% penalty tax if you are younger than age 59½ (or age 55 if you have retired or left your employment with the City).

Tools & Resources

Make the most of your retirement planning by taking advantage of the resources on the Nationwide website:

  • Nationwide – Access tools and education to help you make informed investment decisions.

Before investing, carefully consider the funds' or investment options' objectives, risks, charges, and expenses. Call (602) 266-2733 for a prospectus and, if available, a summary prospectus, or an offering circular containing this and other information. Please read them carefully. Investing involves risk, including the risk of loss.