Description
Memorandum
Summary
Effective January 1, 2027, Delray Beach will deposit its employer matching contribution into participating employees’ 401(a) accounts, even when employees make their matching contribution through the 457(b) plan. A 401(a) account will be established through Empower if needed. The change affects employees receiving the City match and is intended to preserve the separate IRS contribution limits for both plans, potentially allowing greater tax-advantaged retirement savings. Employees may continue contributing 1%, 2%, or 3% of compensation, subject to plan rules. 401(a) funds generally are unavailable until age 59½, while 457(b) funds may be accessible after leaving City employment. Employees should review elections and consider financial advice.
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