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Everything you need to stay informed about your plan.

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Information about the Plan

On the following pages, you will find important information about the City of Santa Ana Deferred Compensation Plan. The information in the guide is just an overview of the plan's features. For more detailed information about your plan, you can request your plan's Summary Plan Description (SPD) from your Plan Administrator.

ENROLLMENT AND ELIGIBILITY

  • You will be eligible to enroll after you reach age 18 years old. You may enroll at any time, after meeting your eligibility requirement.

  • You can enroll online: sa457futures.retirepru.com Or join by phone: 877-PRU-2100 (877-778-2100). Hearing impaired?  Please call 877-760-5166.

YOUR CONTRIBUTIONS

  • You may contribute a minimum of $0 per paycheck, on a pre-tax basis, up to an annual maximum amount of $19,500.

  • You may make Roth contributions to your retirement plan account.

  • If you will be at least 50 years old in 2020, you are also eligible to make an additional pre-tax catch-up contribution of $6,500 per year.

  • You may change your contribution amount any time.

  • You may roll over money to your account, in any amount, from another similar retirement plan. Refer to the SPD for further information

In 2020, federal tax law allows you to make  a combined  contribution of pre-tax  and Roth contributions to your retirement plan up to $19,500.

ROTH CONTRIBUTIONS

Your retirement plan allows you to make Roth contributions to your account. Roth contributions combine the savings and investment features of a traditional pre-tax retirement program with the tax-free distribution features of the Roth IRA. If you meet certain requirements down the road, the Roth money you withdraw at retirement—and its investment earnings—won't be taxable. When deciding if you should make Roth contributions, consider the following scenarios:

  • If your tax rate will be higher in retirement than it is today, making designated Roth contributions may make sense for you.

  • If your tax rate will be lower in retirement than your working years, you may benefit more from making pre-tax contributions and deferring your tax obligation until retirement.

  • With tax rates in retirement being uncertain, you may choose to diversify your taxation by making both pre-tax and Roth contributions to your retirement plan.

To help you determine if Roth contributions are appropriate for you, visit www.roth.connectwithpru.com and enter your personal data into our Roth contribution calculator.

In 2020, federal tax law allows employee and employer contributions up to a combined total of $57,000 or 100% of compensation, whichever is less.

WHAT IS VESTING?

"Vesting" refers to your ownership of the money in your account. You are always 100% vested in your own contributions.

ACCESSING YOUR MONEY

You may be able to access money in your retirement plan account through a loan, in-service withdrawal, or an unforeseen emergency withdrawal.

LOANS

Your plan allows you to take:

2 loans at one time

Application fee:

$50 for each loan

Processing fee:

$6.25 quarterly

Method of repayment:

Payroll Deduction

Tax consequences:

If loan is not paid in full, tax consequences will apply.

Prepayment  available:

Yes

GENERAL PURPOSE

Interest rate:

Prime+ 2%*

Minimum loan:

$1,000

Maximum  loan:

50% of your vested account balance, up to $50,000 in a 12-month period*

Repayment period:

0 to 5 years

*Interest is paid back to participant's account.  Additional information about loan calculations and loan interest rate details can be found in your plan's loan policy.

PRIMARY  RESIDENCE

Interest rate:

Prime+ 2%*

Minimum loan:

$1,000

Maximum  loan:

50% of your vested account balance, up to $50,000 in a 12-month period*

Repayment period:

5 to 15 years

*Interest is paid back to participant's account. Additional information about loan calculations and loan interest rate details can be found in your plan's loan policy.

Any outstanding loan balance not paid back at termination becomes taxable in the year of default. Under the Tax Cuts and Jobs Act for defaults related to termination of employment after 2017, the individual has until the due date of that year's return (including extensions) to roll over this amount to an IRA or qualified employer plan.

In-service withdrawals
While employed, you may make in-service withdrawals within plan restrictions.

Unforeseeable emergency withdrawals*
You can withdraw money from your account in certain emergency situations, as defined by your plan. Please call Prudential's Participant Service Center for more details.

*Unforeseeable emergency withdrawal: The taxable portion of a withdrawal is taxed as ordinary income. The total amount of the withdrawal may not be more than the amount required to meet your immediate financial need; however, you may have the option to "gross-up" the amount you receive to cover taxes. You may want to consult a tax professional before taking a withdrawal from the plan.

Disability option: If you become disabled, you may be eligible to receive all of your vested account balance immediately. The amount you receive is subject to all applicable income taxes, but no penalties.

RETIRING OR LEAVING THE EMPLOYER

It's important to learn about all options regarding your account balance before you retire or separate from service. You will need to make a decision about what to do with your vested account balance when one of the following events occurs:

  • Your employment with City of Santa Ana ends.

  • You retire from City of Santa Ana at the normal retirement age of 70½.

  • You become permanently disabled.

  • Your death. Your beneficiary is entitled to your account balance when you die; they are responsible for all federal income tax imposed. Distribution upon death may also be subject to federal and state inheritance and estate taxes.

When any of the events listed above occur, you or your beneficiary will have several distribution options. It's important to understand each of the distribution options listed in your plan's Summary Plan Description, before you make your decision. For assistance, please contact a Prudential representative at 877-778-2100.


Keeping it in the plan
At the time benefits are payable, the amount of your vested account balance will determine how your account is handled.

Directly rolling it over
You can choose to move or "roll" money over into another qualified retirement plan, a Traditional Individual Retirement Account (IRA), or Roth IRA. This allows your money to continue growing tax-deferred. Keep in mind, if you have not reached the age 59½ and you choose to move your money into a retirement account other than a 457 plan, subsequent withdrawals may be subject to a 10% early withdrawal penalty. This is based on our understanding of the tax law. You may wish to discuss this matter with your tax advisor. Because each situation is unique, neither we nor our representatives can provide tax or legal advice.

Having account balance paid in the form of an annuity
An annuity pays you a regular income, usually monthly. This option spreads the tax burden over a period of years.

Having account balance paid in installments
You can withdraw your account balance in a series of payments.

Lump sum
You may choose to take a full or partial lump sum distribution. A 20% federal income tax may be applied. If you have not reached age 59½, you may be subject to a 10% early withdrawal penalty on any non-457 rollover money.

PUBLIC SAFETY OFFICERS

Retired Public Safety Officers are eligible for a tax free withdrawal of up to $3,000 per year to pay for qualified health and long-term care insurance premiums.

INVESTMENT TYPES

This section is designed to provide general information about different types of investments.  Not all plans offer investments in every category. Information about the specific investments offered through your plan is available in the Investment Options section of this guide. The main types of investments in which participants generally invest:

Stable-Value Investments: These investments combine safety of principal, liquidity and a competitive rate of return with potentially improved earnings power versus alternative short-term investments.

Fixed-Income Investments: Invest in corporate and government bonds. They can go up or down in value each day, so they carry more risk than stable-value investments, but also offer more opportunity for a potentially larger return. Fixed income investment mutual funds are subject to interest rate risk; their value will decline as interest rates rise.

Stocks/Equities: Stock funds also called equity investments represent ownership in funds, which own shares of corporations. Stock funds offer you a chance to share in the profits or losses of those corporations. Stock funds have the potential for higher returns, but they carry more risk than the other investment options.

Allocation: Allocation investments combine fixed-income and stock components to offer you a combination of the interest income from fixed-income investments and the growth potential of stock investments. As a result, allocation investments typically do not experience the full ups and downs of the stock market.

Retirement Income: Although they may vary in structure, these options are designed to provide a steady stream of income for life.

INVESTMENT OPTIONS

City of Santa Ana Deferred Compensation Plan offers a selection of investments to choose from. You can decide how you want your money invested and may move money between investments any time. Please refer to the disclosures at the end of this section for a description of any restrictions that may apply.

Stable Value
Guaranteed Income Fund*
Fixed Income—Money Market
Vanguard Federal Money Market Fund Investor Shares*,**
Fixed Income—Intermediate Term Bond
Metropolitan West Total Return Bond Fund Plan Class*,**
Fixed Income—Multisector Bond
PIMCO Income Fund Administrative Class**
Allocation—Target-Date 2000-2010
T. Rowe Price Retirement 2005 Fund**
T. Rowe Price Retirement 2010 Fund**
Allocation—Target-Date 2015
T. Rowe Price Retirement 2015 Fund**
Allocation—Target-Date 2020
T. Rowe Price Retirement 2020 Fund**
Allocation—Target-Date 2025
T. Rowe Price Retirement 2025 Fund**
Allocation—Target-Date 2030
T. Rowe Price Retirement 2030 Fund**
Allocation—Target-Date 2035
T. Rowe Price Retirement 2035 Fund**
Allocation—Target-Date 2040
T. Rowe Price Retirement 2040 Fund**
Allocation—Target-Date 2045
T. Rowe Price Retirement 2045 Fund**
Allocation—Target-Date 2050
T. Rowe Price Retirement 2050 Fund**
Allocation—Target-Date 2055
T. Rowe Price Retirement 2055 Fund**
Allocation—Balanced Blend
Janus Henderson Balanced Fund Class I**
Large Cap—Value
T. Rowe Price Equity Income Fund*,**
Large Cap—Blend
American Funds Fundamental Investors Class R-5**
Vanguard Institutional Index Fund Institutional Shares**
Large Cap—Growth
JPMorgan Large Cap Growth Fund Class R4
Mid Cap—Value
Vanguard Selected Value Fund Investor Shares**
Mid Cap—Blend
Vanguard Mid-Cap Index Fund Admiral Shares**
Mid Cap—Growth
T. Rowe Price Mid-Cap Growth Fund I Class*,**
Small Cap—Value
American Beacon Small Cap Value Fund R6 Class*,**
Small Cap—Blend
DFA U.S. Small Cap Portfolio Institutional Class Vanguard Small-Cap Index Fund Admiral Shares**
Small Cap—Growth
Invesco Small Cap Growth Fund R5 Class*,**
International—Large Blend
MFS International Value Fund Class R4*,**
Vanguard Total International  Stock Index Fund Admiral Shares**
International—Large Growth
American Funds EuroPacific Growth Fund Class R-5*,**

*These investments are included in your plan's GoalMaker portfolios. These investments are subject to change. You will be notified in writing in advance of any such change.

Investors should carefully consider a fund’s investment objectives, risks, charges and expenses before investing. For more complete information about the mutual funds available through your plan, please call 877-778-2100 for a free prospectus, and if available the summary prospectus that contains this and other information about our funds. You should read the prospectus and the summary prospectus if available, carefully before investing. It is possible to lose money investing in securities.

**Registered Mutual Fund

Shares of registered mutual funds are offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company.

You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. The yield quotation more closely reflects the current earnings of the fund than the total return quotation.

Generally, distributions resulting from your termination of employment, retirement, death or disability, hardship withdrawals and minimum required distributions will always be paid in full without any fees or restrictions and will not be deferred.  Prudential reserves the right to defer certain other withdrawals from GIF assets if your plan's pool level cashflow exceeds 10% of the pool's beginning of calendar year balance.  A pool consists of similar contracts that are funded with us in the same calendar year. This availability of withdrawals and distributions is subject to the specific provision of your retirement plan.

Amounts withdrawn from this investment may not be transferred to a competing fund for a period of 90 days after the withdrawal date. Competing funds are generally short-term fixed income investments, money market investments, or stable value investments that may be available in your plan.

If the SEC has suspended or otherwise restricted trading, or another emergency outside of our control exists, Prudential may defer transfers, distributions  or disbursements  for up to six months.

The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target-date funds will become more conservative as the target date approaches by lessening your equity exposure and increasing your exposure in fixed income investments. The principal value of an investment in a target-date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income. A target-date fund should not be selected solely based on age or retirement date. Before investing, participants should carefully consider the fund's investment objectives, risks, charges and expenses, as well as their age, anticipated retirement date, risk tolerance, other investments owned, and planned withdrawals. The stated asset allocation may be subject to change. It is possible to lose money in a target-date fund, including losses near and following retirement. Investments in the funds are not deposits or obligations of any bank and are not insured or guaranteed by any governmental agency or instrumentality.

GOALMAKER
Your retirement plan offers GoalMaker®, an optional easy-to-use asset allocation program that will invest your contributions in a portfolio that matches your investor style and years to retirement.

By enrolling in GoalMaker, you direct Prudential to immediately reinvest your future contributions and existing account balance (if applicable) to match this investment allocation. Your entire account will be rebalanced according to this portfolio unless a restriction is in place or a portion of your account is invested in a restricted source that isn't available through GoalMaker. Of course, as your goals and years to retirement change, you can select a new portfolio at any time without charges or penalties.  Making an allocation change, however, will cause you to no longer be enrolled in the GoalMaker program.

The GoalMaker portfolio you choose will be automatically rebalanced at a frequency determined by your plan. Automatic rebalancing with GoalMaker ensures your asset allocation stays in line with your original investment objectives. During the rebalancing process, money is moved among investments in your GoalMaker portfolio to maintain the allocation percentages you choose.

Additionally, GoalMaker's optional age adjustment feature automatically adjusts your allocations over time, based on the number of years you have left until retirement. How does it work? If you choose a conservative investor portfolio with 115 years to retirement, once you reach an age that brings you ten years before your expected retirement age, your account will automatically be updated to the conservative investor portfolio with 6-10 years to retirement.

To see how your money would be invested across various asset classes, find your Investor Style code in the chart below that matches your investing style.

GoalMaker Allocations

Investment options

Conservative

Moderate

Aggressive

C01

C02

C03

C04

M01

M02

M03

M04

R01

R02

R03

R04

0-5
years

6-10
years

115
years

16+
years

0-5
years

6-10
years

115
years

16+
years

0-5
years

6-10
years

115
years

16+
years

Stable Value
Guaranteed Income Fund
44% 39% 23% 14% 35% 23% 16% 7% 21% 16% 9% 0%
Fixed Income (Long Term   Intermediate)
Metropolitan West Total Return Bond Fund Plan Class**
Columbia Quality Income Fund Advisor Class**

16%

16%

13%

14%

13%

13%

8%

8%

12%

13%

13%

13%

9%

10%

4%

14%

12%

13%

9%

10%

5%

6%

0%

0%
Large Cap Stock—Growth
American Funds Growth Fund of America Class R-5**
5% 7% 11% 15% 8% 11% 14% 17% 12% 14% 16% 19%
Large Cap Stock—Value
T. Rowe Price Equity Income Fund**
5% 7% 11% 15% 8% 11% 14% 17% 12% 14% 16% 19%
Small/Mid Cap Stock—Growth
Invesco Small Cap Growth F R5 Class**
T. Rowe Price Mid-Gap Growth Fund I Class**

2%

1%

2%

2%

3%

3%

4%

4%

3%

2%

3%

3%

4%

3%

5%

5%

3%

3%

4%

3%

5%

5%

7%

6%
Small/Mid Cap Stock—Value
Ariel Appreciation Fund Investor Class**
American Beacon Small Cap Value Fund R6 Class**

2%

1%

2%

2%

3%

3%

4%

4%

2%

3%

3%

3%

3%

4%

5%

5%

3%

3%

3%

4%

5%

5%

6%

7%
International Stock
MFS International Value Fund Class R4**
American Funds EuroPacific Growth Fund Class R-5**

4%

4%

6%

6%

8%

9%

12%

12%

7%

7%

8%

9%

11%

12%

15%

16%

9%

9%

11%

12%

14%

14%

18%

18%

** Registered Mutual Fund

Keep in mind that application of asset allocation and diversification concepts does not ensure safety of principal and interest. It is possible to lose money by investing in securities.

Morningstar uses a holistic, total wealth approach steeped in research that considers an investor’s unique risk preferences and risk capacity to map an investor to the most appropriate overall stock and bond mix in weights represent the optimal combination of "accumulation-oriented" characteristics vs. "retirement-oriented" characteristics given the unique profile of the investor.

In applying particular asset allocation models to your individual situation, you should consider your other assets, income, and investments (e.g., equity in a home, Social Security benefits, individual retirement plan investments, savings accounts, and interests in other qualified and nonqualified plans) in addition to your interests in the plan.

There are other designated investment alternatives that have similar risk and return characteristics available to you. More information on these investment alternatives is available in the fund fact sheets included in this guide.

Self Directed Brokerage
This optional program allows you to invest in individual stocks and bonds and/or an expanded selection of mutual funds through your retirement account. Trading individual securities adds a potentially higher level of risk to your account, so you should consider this option carefully. Also, a minimum account balance is required for brokerage accounts and additional fees apply. Call Prudential at 877-778-2100 or contact your Budget Analyst for an information package and/or enrollment materials.

Self-Directed Brokerage products and services are offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. Self-Directed Brokerage accounts are carried and maintained by National Financial Services LLC pursuant to a clearing agreement with PIMS

Investors should carefully consider the fund’s investment objectives, risks, charges and expenses before investing. The prospectus and (if available) summary prospectus contain complete information about the investment options available through your plan. Please call 877-778-2100 for a free prospectus and (if available) a summary prospectus containing this and other information about our mutual funds. You should read the prospectus and summary prospectus (if available) carefully before investing. It is possible to lose money by investing in securities.

Shares of registered mutual funds are offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company.

GoalMaker’s model allocations are based on generally accepted financial theories that take into account the historic returns of different asset classes. But, of course, past performance of any investment does not guarantee future results. Participants should consider their other assets, income and investments (e.g. equity in a home, Social Security benefits, individual retirement plan investments, etc.) in addition to their interest in the plan, to the extent those items are not taken into account in the model. Participants should also periodically reassess their GoalMaker investments to make sure their model portfolio continues to correspond to their changing attitudes and retirement time horizon.

Morningstar Investment Management, LLC is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Investment Management, LLC provides consulting services to Prudential with respect to the GoalMaker model portfolios and in no way acts as an investment advisor to investors of Prudential’s products or services. The GoalMaker model portfolio allocations were developed by Morningstar Investment Management, LLC within a set of guidelines determined by Prudential. The extent to which Morningstar Investment Management, LLC’s recommendations are implemented within the models is at the sole discretion of Prudential. Morningstar Investment Management, LLC is not affiliated with Prudential. The Morningstar name and logo are registered marks of Morningstar, Inc..

Copyright © 2018 Morningstar Investment Management, LLC. All rights reserved. The information, data, analyses and opinions contained herein (a) include confidential and proprietary information of Morningstar Investment Management, LLC; (b) may not be copied or redistributed for any purpose; (c) are provided to Prudential solely for Prudential's use or the use of Prudential's authorized agents and contractors, and (d) are not warranted or represented to be correct, complete, accurate or timely.

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