What is a governmental 457(b) plan?
A governmental 457(b) is a deferred compensation plan available to many public employees — including FRS members — alongside the FRS pension. Contributions are deducted from pay before tax, reducing current taxable income, and the account grows tax-deferred; withdrawals are taxed as ordinary income. Many Florida employees have access through the State of Florida Deferred Compensation Plan or a local-government equivalent. A 457(b) is separate from the FRS Pension Plan and Investment Plan: it is your own account, funded by your own elective deferrals, on top of whatever FRS provides.
The separation-from-service advantage
The defining feature of a governmental 457(b) is that there is no 10% IRS early-withdrawal penalty after separation from service, at any age (IRC §72(t)(9)). A Special Risk member who retires at 48 can draw on a 457(b) immediately without a penalty — no Public Safety Officer exemption needed, unlike 401(k) or 403(b) money. For members whose FRS normal retirement arrives well before age 59½, this makes the 457(b) the account that can bridge the years between retirement and the ages when other accounts unlock.
Contribution limits (2026)
The standard 457(b) elective deferral limit is $24,500 for 2026. Members age 50 and over may contribute up to $32,500 using the age-50 catch-up. A separate "final three years" special catch-up allows contributions of up to twice the standard limit — up to $49,000 — during the three years prior to normal retirement age. The 457(b) limit is also separate from the §402(g) limit shared by 401(k) and 403(b) plans, so a member with access to both a 403(b) and a governmental 457(b) may defer the full limit into each.
Roth 457(b) options
Some employers offer a Roth 457(b) option. Roth contributions are made after tax — they do not reduce current taxable income — but qualified withdrawals, including growth, are tax-free. Whether a Roth option exists depends on the employer’s plan.
Required minimum distributions
Required minimum distributions (RMDs) from a 457(b) begin at age 73, or age 75 for those born in 1960 or later (per SECURE 2.0). Rolling 457(b) funds into a Roth IRA eliminates RMD requirements during the owner’s lifetime — a consideration for members who retire in their late 40s or early 50s and have 20+ years before RMDs would apply.
Other uses: buying FRS service credit
A 457(b) can also fund a purchase of FRS service credit. The Division of Retirement accepts payment by direct rollover or trustee-to-trustee transfer of pre-tax money from an eligible plan — including a governmental 457(b) such as the State of Florida Deferred Compensation Plan. Moving the money directly from plan to Division avoids the distribution passing through your hands.
Modeling your 457(b) with your FRS benefit
Two PensionForge tools model a 457(b) account alongside FRS benefits. The Projection calculator combines your FRS pension, DROP lump sum, and 457(b) account growth into a single retirement-day picture. The DROP exit strategy calculator models the federal tax implications of deploying a DROP lump sum across a 457(b), Traditional IRA, Roth conversion, cash, or a split. Both are estimates for educational purposes based on the inputs you provide.