DCP – Deferred Compensation Program

Voya Financial is the DRS record keeper for DCP, Plan 3 and JRA customer investment accounts. They can assist you with transactional needs and account information.

Call Voya: 888-327-5596 (TTY users dial 711)

Fax: 844-449-2551

Chat live with customer service when you select the chat icon from the Voya login page (you can also chat once you are logged into your investment account).

Mailing address:
Voya Financial
Attn: Washington State DRS
PO Box 389
Hartford, CT 06141

What does the record keeper do?
The DRS record keeper maintains the records for Plan 3, DCP and JRA customer investment accounts and assists customers with transactions related to these accounts.

Enrollment timeline

• Day 1 You are hired
• About 30 days after hire You receive a mailed DCP notification letter (the timing is dependent on your employer’s payroll cycle)
• Within 30 days of date on notification letter You have 30 days to opt out of DCP enrollment if you do not want to participate
• 2 months after your hire date Your 3% paycheck contributions begin if you make no changes to your DCP account
• Within 90 days of your first contribution You can still withdraw your automatic enrollment contributions and stop your deferrals.
  Example: Someone hired in February will begin DCP contributions in April and will have until July to stop and withdraw these contributions
• 90 days after your first contribution At any time during your employment, you can change or stop your contributions, and you can change investment options. Only normal withdrawals are permitted after this point (normal withdrawals are when you leave DCP-covered employment).

Why have I been enrolled? 

Your organization participates in automatic enrollment.

Are any employees exempt from automatic enrollment? 

Yes. Automatic enrollment does not include student employees or retirees returning to work, even if they fit the newly hired/full time employee status.

How do I change my DCP options or opt out of automatic enrollment? 

Once you receive a DCP notification letter you can choose to opt out, change your contribution options or select another investment. Make these changes through your online account or call 888-327-5596.

How much will I contribute with automatic enrollment? 

3% of pretax income is the default deferral rate.

When will I make my first contribution? 

Approximately two months after your hire date. The time varies due to your employer’s payroll cycles. Changes made during the initial automatic enrollment period make you an active DCP participant, which means your contributions may begin sooner AND you can no longer withdraw any contributions made under automatic enrollment.

What kinds of changes make me an active participant? 

If you change your investment option or contribution amount, this will make you an active participant (which means you can no longer withdraw any contributions made during automatic enrollment).

Can I make changes after the opt-out deadlines have passed? 

Yes. At any time during your employment, you can stop your deferrals or change your contribution amounts. You can also change investment options.

Where will my contributions be invested? 

Your contributions will be invested in the Retirement Strategy Fund that assumes you’ll begin withdrawing funds at age 65.

How do I designate a beneficiary for this account? 

Once you are enrolled, designate beneficiaries through DRS using online account access or the beneficiary form; if you don’t designate a beneficiary, the payment would go to your estate.

If I opt out, can I join DCP later? 

Yes.

Can I withdraw contributions made during automatic enrollment? 

Yes. If you make this choice within 90 days from your first contribution, you can withdraw your contributions from DCP as long as the record keeper receives your withdrawal request within the 90 days. These funds are not eligible for a rollover as long as you are actively employed. Log into your account or contact the DRS record keeper at 888-327-5596 to request a withdrawal.

Are my contributions subject to tax withholding if withdrawn? 

Yes, because your contributions are pretax dollars. The tax withholding is 10%. You will receive a 1099 tax statement for the year of the withdrawal. DCP doesn’t have early withdrawal penalties.

• DCP Withdrawal – This is the withdrawal type you can make when you separate from employment. The withdrawal offers you a variety of options for payment types including lump sum, installments and rollovers.
• DCP In-Service Withdrawal – This type of withdrawal allows you to make DCP withdrawals while you are still employed. See the below section “Can I withdraw from DCP while employed?” for eligibility information.
• RMD Change Request – Customers who receive a required minimum distribution (RMD), use this form to request changes to your annual minimum distributions. More about required minimum distributions. 
• Beneficiary Distribution Request – Request a withdrawal from your awarded beneficiary account.
• Alternate Payee Withdrawal – Withdraw funds per a Qualified Domestic Relations order.
• Unforeseeable emergency withdrawals – If you are experiencing severe financial hardship because of an unforeseeable emergency, you may be eligible to withdraw funds from your DCP account. IRS requirements restrict this type of withdrawal, and may limit the amount you can withdraw.
• Automatic Enrollment Withdrawal – New employees automatically enrolled in DCP have up to 90 days after their first paycheck deferral to cancel DCP and withdraw any contributions. After 90 days, standard withdrawal eligibility applies.

More DCP transactions

• Direct Deposit – Request or modify direct deposit  for your DCP, Plan 3 or JRA investment account payments.
• IRS Form W-4P – Request to have federal income tax withheld from each withdrawal or annuity payment you receive.

In some cases, you can withdraw your DCP funds while you are still working for a DCP-covered employer. Here are those exceptions:

• Unforeseeable emergency withdrawals: If you are experiencing severe financial hardship because of an unforeseeable emergency, you may be eligible to withdraw funds from your DCP account. IRS requirements restrict this type of withdrawal, and may limit the amount you can withdraw. See more about DCP emergency withdrawals.
• Automatic enrollment withdrawal: New employees automatically enrolled in DCP have up to 90 days after their first paycheck deferral to cancel DCP and withdraw any contributions. After 90 days, standard withdrawal eligibility applies. For more information, call 888-327-5596.
• De minimus request: If you have not contributed to DCP in at least 24 months, and your account balance is under $5,000, you can request a one-time withdrawal of these funds. For more information, call 888-327-5596.
• Age 59 1/2 or older distribution: If you are age 59 1/2 or older and you wish to withdraw or rollover from your account while you are employed, you can. To complete this withdrawal online go to your DCP account, select Loans & Withdrawals, Request a Withdrawal and choose the withdrawal type. Or call the DRS record keeper at 888-327-5596.
• Withdrawing rolled-in contributions: If you rolled funds from another plan or program into your DCP account, you can withdraw these funds. Keep in mind that these funds still carry any tax requirements or early withdrawal penalties they arrived with when you rolled them in. To complete this withdrawal online go to your DCP account, select Loans & Withdrawals, Request a Withdrawal and choose the withdrawal type. Or call the DRS record keeper at 888-327-5596.
• Transferring to another provider under the plan: If you have not separated from your employer, but have transferred to a position that participates in a 457 deferred compensation program outside of Washington State DCP, you can withdraw your funds to transfer them to the participating plan. For more information, call 888-327-5596.

Two things you should know:

1. The criteria of an unforeseeable emergency for DCP is set by the IRS. Any distributions must adhere to these rules.
2. Knowing what an unforeseeable emergency is now could prevent some complications for you in the event a hardship occurs.

For example, credit card debt is not a qualified unforeseeable emergency. Even if the card was used to pay for a medical emergency. For us to approve the distribution, the need must be outstanding. While emergency medical bills could be approved for distribution, a credit card bill for those same bills would not.

How to request an unforeseeable emergency withdrawal from DCP

You can apply online or by phone.

Apply online: Log in, go to your DCP account, select Loans & Withdrawals, Request a Withdrawal and choose the withdrawal type.

Apply by phone: Contact the DRS record keeper, Voya Financial at 888-327-5596 when the emergency occurs. Inform them of the need to withdraw funds from your DCP account.

What’s next? Voya will provide you with instructions on what actions are needed next. You’ll need to gather documentation to support your claim. Copies of bills, invoices, quotes—documentation is more than a letter written by you.

Here are some situations where the unforeseeable distribution may or may not apply.

These could be unforeseeable emergencies:

• An illness or accident affecting you, your spouse, or your dependent
• Loss of your property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance, e.g., as a result of a natural disaster)
• The need to pay for the funeral expenses of your spouse or dependent
• Imminent foreclosure of, or eviction from, the participant’s primary residence
• Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant 

In all of these cases, you must be able to prove you are NOT able to cover the cost without the DCP withdrawal.

These are NOT unforeseeable emergencies, and cannot be used as reason to request a DCP withdrawal:

• Credit card debt (even if the debt is from paying for an emergency)
• Buying a home
• College tuition
• Student loans

More about unforeseeable emergency withdrawals

IRS unforeseeable emergency distribution information

Washington Administrative Code: Unforeseeable emergency withdrawals

If the DRS record keeper, Voya Financial denies your request for distribution, you’ll receive a letter with instructions to request further review by DRS if you wish. See additional information.

What are my withdrawal options? 

If you are a spouse, you have the same withdrawal options as the participant did. You can leave the money in the account, withdraw in full or withdraw it in payments. If you are not a spouse, you can withdraw the funds. For more specific information about withdrawal options, contact the DRS record keeper.

Can I contribute additional funds to the awarded beneficiary account? 

No.

Can I roll my beneficiary account funds into my IRA? 

A spouse beneficiary can roll the funds into a traditional IRA. A non-spouse can roll the funds into an inherited IRA.

Can I roll my awarded beneficiary account into my own DCP account? 

No. The accounts must be kept separate for distribution purposes. However, you can withdraw the beneficiary account funds while you are still working for a DCP-covered employer.

How do I name a beneficiary for my awarded beneficiary account? 

You can’t. Upon your death, any remaining funds go directly to your estate.

Who can I contact? 

For more information about beneficiaries, contact DRS.

Select the funds below to view their fact sheets. Funds for each table are listed in order of risk (lowest to highest).  View the latest performance for all funds through your online account. The management fees associated with each fund are included here. These costs are in addition to the administrative fees detailed in the table lower in this section.

Retirement Strategy Funds (Fees as of July 2024)

Build and monitor funds (Fees as of July 2024)

Investment performance

View or compare the most recent performance for your DCP investments through your online account. You can also access a quarterly overview of fund performance in the table links that follow.

Administrative fees (as of July 2024)

Make investment changes through your online account. Change your fund selections anytime during or after your employment. You can also contact the record keeper for assistance. 

Trading restrictions:

To safeguard customers against the effects of excessive trading, DRS has established trading restrictions that regulate how frequently you can change investments.

If you are transferring more than $1,000 out of a fund, you are required to wait 30 calendar days before transferring money back into that same fund. The 30-day window is based on the last time you made a transfer out of the fund. The restriction will not affect your regular contribution or the ability to leave state service and withdraw your money. Transfers of $1,000 or less are not impacted by the trading restrictions.
DRS periodically reviews trade data to identify excessive trading. If existing restrictions are not sufficiently addressing excessive trade practices, DRS might take additional action. DRS reserves the right to establish or revise restrictions to comply with federal or state regulations, or as circumstances indicate.

In addition to the trading restrictions described above, DRS will also comply with restrictions put in place by our fund managers.

Note: Excessive trading (also referred to as “market timing”) involves transferring significant amounts of money and/or making frequent trades between investment options. This practice requires more cash on hand to honor the frequent trades and transfers. Because the excess cash is used to cover potential transfers instead of being invested, long-term returns can be lowered for other participants. Excessive trading can also increase fund management costs.

Can DRS give me investment advice?

No. While DRS and the DCP record keeper can provide you with information about investments, we cannot offer investment advice. If you are still not sure which investment approach might be right for you, talk with your financial advisor. To find out more about each fund, see each investment’s Fund Fact Sheet (linked within each plan’s section). These fact sheets are prepared by the fund managers and contain information about performance, asset mixes and the goals of the fund.

How do I choose a one-step Retirement Strategy Fund?

These funds are listed by date in increments of 5 years. Just choose the date closest to the one you plan to begin withdrawing funds. In other words, take the year you were born and add it to the age you expect to retire or withdraw your funds. The sum is your target date.

birth year + retirement age = target date
Example: 1993 + 65 = 2058

Pick the fund with the date closest to your target date. In the example here, the closest fund would be 2060. If you have been retired for 15 years or more, you would choose the Retirement Maturity Strategy Fund. See your plan section above for performance and fee information related to these funds.

What costs are associated with DCP investments?

All investments include costs, which take the form of fees. At just a fraction of a percent, most investment fees seem pretty insignificant and many of us ignore them. But knowing the true cost of your investments is a critical part of retirement savings. Let’s take a closer look at investment costs. DCP has two different types of costs: Administrative and management.

Administrative costs: These cover investment services provided by the Washington State Investment Board (WSIB), recordkeeping, communications and customer service. For DCP these fees are listed on your quarterly statement under “Expenses.” Administrative costs apply to all customers, are based on the administrative costs of the program and are determined annually. Changes, if any, usually go into effect in July.

Because DRS only recovers the cost of administering DCP, we keep the fees low. The DCP administrative costs include WSIB, recordkeeping and the DRS administrative cost. The administrative fee for DCP is 0.1084%, which is very low for voluntary retirement savings. For this reason, many DCP participants choose to have savings plans from other employers rolled into their DCP savings-to consolidate and simplify retirement funds and to save costs. To see if this option is right for you, be sure to consider any potential costs and investment limitations.

Management costs: Funds are managed by teams of investment professionals. The costs vary with each investment option. Management costs are included in the price of shares and won’t be visible on your statement. See the DCP fees table to view actual management fees for each fund.

What are diversification, performance and risk? Why do they matter?

Diversification
Diversification is a strategy that can be neatly summed up as “Don’t put all your eggs in one basket.” The strategy involves spreading your money among various investments in the hope that if one loses money, the others will make up for those losses. Dividing investments among different kinds of assets, such as stocks and bonds, with different risks and returns, can minimize the potential harm from any one asset. You can invest in any combination of the investment funds available through DCP.

With the One-Step Investing approach, your Retirement Strategy portfolio is already well diversified and will automatically adjust as you move closer to your target date. With the Build and Monitor approach to investing, you can allocate your contributions among the seven available funds to achieve diversification.

Your portfolio should include investments in several different objective categories. Spreading your assets among different types of investments might help you achieve a favorable rate of return while minimizing your overall risk of losing money. Market or other economic conditions that can cause one category of assets, or one particular security, to perform very well can often cause another asset category, or another particular security, to perform poorly. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

Performance
Past investment performance is no guarantee of future results. So why do we share past performance if it can’t predict future returns? Viewing past performance can provide you with insight into how a particular investment works and can help you determine what is “normal” behavior for an investment.

Risk
Let’s talk about risk. The growth of investments is always tied to some form of risk. Earnings do not always increase. Higher risk investments are designed to have the potential for higher earnings (faster growth), but they also have a greater potential for a loss of principal. Lower risk investments minimize risk, but this also comes at the cost of potential for faster growth. This is generally why younger investors will have higher risk investments where investors closer to retirement age select lower risk investments. The level of risk you choose is a personal decision.

Where can I get additional information about investing?

Financial Literacy and Education Commission
888-MyMoney – mymoney.gov
MyMoney.gov is an online point of access to financial information from the 21 federal agencies, departments and bureaus that make up the Financial Literacy & Education Commission. Find information about how to plan for a host of life events that have financial implications, such as birth or adoption of a child, home ownership or retirement.

U.S. Securities and Exchange Commission (SEC)
888-SEC-6585 – sec.gov
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation.

Washington State Department of Financial Institutions (DFI)
877-746-4334 – TTY: 360-664-8126 – dfi.wa.gov
DFI provides regulatory oversight for our state’s financial service providers.

Washington State Investment Board (WSIB)
360-956-4600 – sib.wa.gov
WSIB closely monitors the performance of all DCP investment options. Safeguarding and maximizing your retirement dollars is one of the investment board’s highest priorities. Trustees of the WSIB have fiduciary responsibility to act only for the benefit of the participants.

What is a required minimum distribution (RMD)?

If you are a DCP customer who is separated or retired, you must withdraw a minimum amount from your retirement investment accounts every year starting when you reach age 73. This minimum distribution of funds is required by federal income tax regulations. DRS calculates and pays out the minimum amount to you each year. This is to help you avoid the 25% tax penalty the IRS can impose if the minimum is not withdrawn.

The payments are automatically distributed to you, so no actions are needed for you to meet the requirements. But you can also choose to make adjustments to the distribution, such as the frequency of payments. Here is the form you need:

If you are still employed under a DCP plan, you are not required to take an annual Required Minimum Distribution. However, you can choose to withdraw the RMD amount once you reach age 73. You can do so online.

Note: The SECURE Act has raised the RMD age from 70 ½ to 73 for most retirees. However, retirees born before July 1, 1949 will still have an annual RMD starting in 2021. DRS recommends that you consult a tax advisor for information on how the new RMD legislation affects you.

How is the minimum payment calculated?

You can calculate your required minimum distribution by taking the previous year’s Dec. 31 investment account balance and dividing it by the IRS distribution period based on your age. If you are a member of Plan 3 and DCP, you have two investment accounts that are subject to minimum distribution requirements and you calculate these separately.

To calculate your own RMD withdrawal, use the table linked below. Find your age in the table. The distribution period is the number you divide your total investment account balance by to get the required minimum amount.

IRS distribution period for your age

See the IRS distribution period for your age.

This table applies to you if your status is:

• Unmarried
• Married with spouse who is not more than 10 years younger
• Married with spouse who is not the sole beneficiary of your account

When is it due?

DRS must issue your minimum payment by Dec. 31 to meet IRS requirements. You’ll usually receive your payment earlier in December. DRS sends reminders each year to all RMD eligible customers. In the years after age 72, these payments will be automatic. You can change the frequency and amount of payment anytime by completing a DCP withdrawal. Your withdrawal amount must at least meet the required annual minimum.

How do the requirements apply to a surviving spouse or beneficiary?

If the original account holder dies, the required minimum distribution is still required for beneficiaries of the account. Here’s how these requirements work:

A spousal beneficiary will be required to continue receiving RMD payments if the account owner had already met the required age. If the account owner had not reached the required age prior to death, the spousal beneficiary will be required to start their RMD payments in the year in which the account owner would have turned age 72.

For non-spousal beneficiaries, the RMD is calculated based on the beneficiary’s life expectancy in the calendar year immediately following the account owner’s date of death. DRS will process an RMD payment if the account owner had turned age 72 or older. If the account also has rollover requests, the RMD will be processed before these.

What if I’m still employed?

If you are still employed by the same DRS-covered employer, the minimum distribution requirement does not apply to you. If you separate from your DCP covered employment and you are age 72 or older, the RMD will apply.

For DCP customers, if you are age 72 or older, you can withdraw your required minimum distribution amount even if you are still employed. Complete the RMD change request form.

What about Plan 1 and Plan 2 members?

Plan 1 and Plan 2 pensions are paid from retirement trust funds and are not subject to minimum distribution requirements. As noted above, RMD rules do apply to DCP accounts. If you have any other investments outside of your Plan 1 or Plan 2 pension account, you may be required to withdraw from those accounts.

More information

To find out more, contact the DRS record keeper at 888-327-5596 or visit the RMD section of the IRS website.

This information about required minimum distributions is a summary. For a complete description of RMD rules and information, see Required Minimum Distributions on the IRS website. If a conflict exists between the information on this page and what is contained in current law, the law governs. Please talk with your financial advisor if you have questions about taxes on your investment funds. DRS team members aren’t able to give tax advice.

Your statements will be available through your online account unless you opt into mailed statements through the record keeper. 

Quarters are divided into the following months:

• First: January through March
• Second: April through June
• Third: July through September
• Fourth: October through December

Your statement could include information for more than one plan, depending on your situation. Quarterly statements are released within two months of the quarter-end.