Percentage of Pay Frequently Asked Questions
WHAT IS PERCENTAGE OF PAY?
Percentage of pay is the option to contribute a percentage of your pay vs. a flat dollar amount. Your pre-tax percentage deferrals will come from your gross salary. Your Roth percentage contributions will be calculated after taxes are withheld.
WHERE DOES THE CONTRIBUTION AMOUNT COME FROM?
A percentage of pay (pre-tax and Roth after-tax) is calculated from your gross salary.
CAN CONTRIBUTIONS BE MADE PRE-TAX OR ROTH AFTER-TAX?
Yes, both can be made. Pre-tax contributions are taken from your paycheck before federal taxes are deducted. Roth after-tax contributions are taken from your paycheck after federal and state taxes are deducted.
HOW IS THE CONTRIBUTION AMOUNT DETERMINED USING A PERCENTAGE RATE?
The amount is determined by multiplying your gross bi weekly earnings by the percentage rate you choose.
Gross Bi weekly pay x Percentage Rate = Contribution Amount
For example: $1500 gross pay x 5% = $75 per pay
Note: When initiating a percentage of pay contribution online, the estimated paycheck impact calculation displayed on the website is based on the gross annual income amount you enter. The calculation does not use your actual gross salary amount; therefore, it represents an estimated contribution value. You may see the potential impact on your paycheck with the Paycheck Impact Calculator.
CAN I SELECT A FIXED DOLLAR AMOUNT AND A PERCENTAGE OF PAY?
You may select either a fixed dollar amount or a percentage of pay, you may not have both in any given pay period.
IF I RECEIVE A RAISE, WHEN WILL THE PERCENTAGE OF PAY ADJUSTMENT BE REFLECTED?
The change will appear on the paycheck, the same month your raise goes into effect.
IS A CONFIRMATION LETTER OR EMAIL SENT OUT WHEN PERCENTAGE OF PAY IS SELECTED?
A confirmation notice is mailed to you when you make your election through a Customer Service Representative (CSR) or when you submit the Contribution Change Form.
If you are enrolled in paperless delivery, you will receive an email confirmation. For online changes, you will receive immediate confirmation on the website.
IF I ELECT PERCENTAGE OF PAY, CAN I CHANGE IT BACK TO A FLAT DOLLAR AMOUNT?
Yes. Log in to your account to change your contribution. Step 1 displays your current percentage amount. From the dropdown menu, select Dollars and input the amount you want to contribute. Additionally, you can call the City of Philadelphia Deferred Compensation Customer Service Team at 855-550-1777 or complete a Contribution Change Form.
IF I SELECT A PERCENTAGE RATE THAT RESULTS IN A DOLLAR AMOUNT THAT EXCEEDS MY NET PAY, WILL THE CONTRIBUTION BE TAKEN FROM MY PAYCHECK?
No action will be taken if the paycheck does not have enough funds available to cover the entire contribution amount.
IF MY PAYCHECK IS NOT LARGE ENOUGH TO COVER MY CONTRIBUTION AMOUNT, WILL I BE NOTIFIED?
No, you will not be notified if the requested contribution amount is not deducted.
WILL THE MONEY COME OUT AT A LATER DATE?
Payroll will continue to try each pay period to take the percentage you elected from your paycheck. It does not make up the missed amounts or take partial amounts. You need to change your contribution to a lower amount that your paycheck can cover.
IF I REACH MY ANNUAL CONTRIBUTION LIMIT, WILL THE DEDUCTION AUTOMATICALLY STOP?
Yes, the payroll system is programed to stop your contributions when you reach your annual maximum. For contribution amounts, please refer to philly457.com or call our customer service team at 855-550-1777.
IS THERE A MAXIMIMUM CONTRIBUTION AMOUNT OR PERCENTAGE?
The maximum is the IRS annual limit. However, on an individual basis when contributing a percentage of your pay you must consider that mandatory deductions are taken out prior to your deferred compensation deduction. For contribution amounts, please refer to philly457.com or call our customer service team at 855-550-1777.
Please note: there is one contribution limit for Pretax contributions and Roth contributions. Your contributions whether pretax or Roth cannot exceed the annual limit.
If you need additional assistance, stop by our local office at 1500 John F. Kennedy Blvd, 2 Penn Center Plaza, Ste 1705, Philadelphia PA (phone 215-568-1960).
Investing involves market risk, including possible loss of principal. Nationwide Retirement Specialists are Registered Representatives of Nationwide Investment Service Corporation, Member FINRA. Nationwide representatives cannot offer investment, tax or legal advice. Consult with your own counsel or adviser before making retirement plan decisions.
Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of nationwide Mutual Insurance Company. 2018