The Washington State Deferred Compensation Program (DCP) is a supplemental retirement savings program (an IRC Section 457 plan) that offers you the opportunity to invest money toward securing the retirement you envision. DCP helps you save for your retirement on a pre-tax basis, offering the options you need to develop a personal investment strategy. You authorize your employer to defer a part of your income, before taxes are calculated, and have that money invested in your DCP account. Both the income you defer and the earnings on your investments grow tax-deferred until they are distributed.
When you enroll in DCP, you decide how much money you want deducted from each paycheck. That can be as little as $15 per payday ($360 per year) or as much as the 2013 maximum of $17,500 a year. You also decide how to invest that money, choosing from the available investment options. Since the money you contribute to DCP is deducted from your paycheck before taxes are taken out, you lower the amount you pay in current federal income taxes.
For additional information:
DCP Overview Brochure
DCP Enrollment Booklet
DCP Participation Agreement