(Voluntary Pre-Tax Benefits) Deferred Compensation The State of Illinois Employees' Deferred Compensation Plan is a supplemental tax-deferred retirement plan for state employees. In 2021, employees under the age of 50 can defer up to $19,500 and employees age 50 or over can defer up to $26,000 per calendar year. The deferrals, together with any earnings, accumulate tax-deferred until the employee terminates service, dies, or incurs unforeseeable financial hardship. Once distributions begin, the distributed monies are fully taxable as ordinary income for federal tax purposes. The funds are