Deferred Compensation is allowed and regulated under IRS Section 457(b) for public employees. You may defer eligible earnings up to the annual maximum set by the IRS. The County requires a minimum contribution of 1% of your wages while participation is active. You may make changes to your contribution amounts up to six times per calendar year.
Contribution Limits 2025
On Nov. 1, 2024, the Internal Revenue Service issued Notice 2024-80(link is external): “2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living.”
457 Deferral Limits: The lesser of the limitation on vested contributions to 457 plans under Internal Revenue Code (IRC) Section 457(e) (15) or 100% of includible compensation went from $23,000 in 2024 to $23,500 for 2025.
Age 50+ Catch-up Limits: The special catch-up available under IRC Section 414(v) for individuals at least 50 years old in 2025 to make eligible contributions to governmental 457 plans did not change. It was $7,500 for 2024 and remains $7,500 for 2025.
Age 60-63 Catch-up Limits: This is a new category under SECURE 2.0 that increased Catch-up Limit for Participants Between Ages 60-63 Governmental 457(b) Plans. The increased catch-up available under IRC Section 414(v) for individuals at least 60 years old and not more than 63 years old in 2025 to make eligible pre-tax (and/or designated Roth) contributions to governmental 457 plans. The limit for 2025 is $11,250 (this is not in addition to the 50+ catchup, it is an increase from $7,500 to $11,250 for ages from 60-63).
457 Special Catch-up Limit: The special catch-up election for employees participating in an eligible 457 Deferred Compensation plan who have elected the special catch-up available in the three years prior to the year of normal retirement age went from a total annual of $46,000 in 2024 to $47,000 in 2025.
**There are two types of catch up provisions available; Special Catch-Up and Age 50+ Catch-Up.
New Updated Contribution limits for 2026
There is a limit increase of $1,000 in 2026, bringing the maximum annual contribution to $24,500, up from $23,500 in 2025.
Catch-up contributions for those age 50 and older has increased to $8,500, allowing a total contribution of $32,500 for 2026. However, SECURE 2.0 introduced higher catch-up limits *for participants aged 60–63*. These individuals may contribute an additional $11,250, instead of the standard $8,500. *Participants must be ages 60, 61, 62 or 63 by December 31st, in order to leverage this increase in your savings for retirement*.
*Beginning January 1, 2026, certain catch-up contributions must be made as Roth (after-tax) contributions:
- Applies to employees age 50+ participating in a governmental 457(b) plan.
- Mandatory for those who earned more than $150,000- in FICA wages with the sponsoring employer in the prior calendar year (subject to cost-of-living adjustments).
- These employees must make catch-up contributions on a Roth basis. Pre-tax contributions are allowed only up to the standard deferral limit; any additional catch-up amounts must be Roth.
- If the employer’s plan does not offer a Roth option, affected employees will not be able to make catch-up contributions at all.
*This change is part of the SECURE 2.0 legislation and is designed to increase after-tax retirement savings for higher-income earners