MNDCP plan overview

The Minnesota Deferred Compensation 457(b) Plan (MNDCP) is a voluntary retirement savings plan (silimar to a 401(k) or 403(b) available to any full-time, part-time, or temporary Minnesota public employee (state, city, county, township, school district, etc.).

The MNDCP allows eligible employees to supplement retirement income from their Minnesota public pension and Social Security benefits. Employees save and invest pre-tax and/or Roth after-tax dollars through automatic payroll deduction, called salary deferrals.

Employees are eligible to withdraw savings from their MNDCP account upon retirement or termination of employment, disability, or to a designated beneficiary(ies) upon death.

MNDCP features

The MNDCP is similar to other types of employer sponsored retirement savings plans (e.g. 403(b), 401(a), or 401(k) plans).

Features that distinguish MNDCP from other types of plans:

  • Participating employees can withdraw savings from their account at any age 30 days after separation of service or at any age after age 59½, regardless of employment status. 
  • Withdrawals prior to age 59½ are not subject to the additional IRS 10% penalty tax that other plans are imposed on other types of retirement savings plans (e.g. 403(b), 401(a), or 401(k) plans and IRAs).
  • The MNDCP does not offer a loan feature; however, in-service withdrawals in the event of an unforeseeable emergency are allowed.
  • Participating employees may request an in-service withdrawal of funds they rolled into their MNDCP account from other types of retirement savings plans (e.g. 403(b), 401(a), or 401(k) plans and IRAs).
  • Both employee AND employer contributions to the MNDCP are subject to FICA and Medicare deductions. Whereas, employer contributions to a 403(b) are not subject to FICA or medicare deductions.