MTA Deferred Compensation Plan (457b): How It Works With Your Pension
Your pension is the foundation — but the MTA's 457(b) deferred compensation plan is how you build real wealth on top of it. Here's how the two work together.
Try the CalculatorWhy It Matters
Contributions come out of your paycheck before taxes, lowering your taxable income today.
Your investments grow without being taxed until you withdraw them in retirement.
It adds a flexible, self-directed layer on top of your guaranteed defined benefit pension.
Pension + 457(b): A Two-Part Strategy
A 30-year MTA pension replaces roughly 60% of your final average salary. The deferred compensation plan helps close the gap between your pension and your full pre-retirement income — giving you more freedom and security in retirement. Because 457(b) funds avoid the 10% early withdrawal penalty after you separate from service, they're especially valuable for employees who retire before age 59½.
Frequently Asked Questions
The MTA Deferred Compensation Plan is a voluntary 457(b) retirement savings plan that lets you set aside pre-tax (or Roth) dollars from your paycheck to invest for retirement. It supplements your guaranteed pension with additional savings you control.
Your pension is a defined benefit guaranteed by a formula. A 457(b) is a defined contribution account — its value depends on how much you contribute and how your investments perform. Together they create a more secure retirement.
Contribution limits are set by the IRS each year. For 2024 the basic limit is $23,000, with additional catch-up contributions allowed for those age 50 and older, and a special pre-retirement catch-up for 457(b) plans.
457(b) plans offer more flexible withdrawal rules than 401(k) or 403(b) plans — once you separate from service, you can access funds without the usual 10% early withdrawal penalty, regardless of age.
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