The Savings Plus Plan (SPP) is a voluntary program offered by the Department of Personnel Administration (DPA) and administered by Nationwide Retirement Solutions. This program allows eligible state and CSU employees to save toward retirement by investing pre-tax contributions in tax-deferred investments, via two deferred compensation plans: a Thrift Plan (IRC 401k)) and a Deferred Compensation Plan (IRC 457). These contributions are made through payroll deductions, prior to federal and state taxes being calculated.

Currently, the plan contribution limits that apply to the SPP are prescribed under Internal Revenue Code (IRC) Sections 401(k) and 457. As a result of the federally mandated Economic Growth Tax and Reconciliation Relief Act (EGTRRA), made effective January 1, 2002, contribution limits and provisions for 401(k) and 457 plans were significantly revised. For the 2004 tax year, the contribution limit is 100% of includible income, or a maximum of $13,000 per year.

The maximum elective deferral limit will increase incrementally on an annual basis, as follows:

Tax Year	Limit
2004	$13,000
2005	$14,000
2006	$15,000

The elective deferral limit will be indexed in $500 increments beginning in 2007.

Additionally, contributions to a 457 plan no longer have to be offset by contributions to a 403(b), or 401(k) plan. For example, for tax year 2004, a participant could elect to contribute up to $13,000 to a 403(b), or 401(k) plan AND up to $13,000 to a 457 plan, for a total contribution of up to $26,000.

In order for eligible employees to take advantage of the tax savings via payroll deduction, an account must be established with the Savings Plus Plan.

For additional information regarding this program, including maximum contribution amounts, catch-up allowances, and administration of the Savings Plus program, please contact their office at (866) 566-4777, or refer to the: SPP web site.