Section 457 Plan

99 514 shall not apply to nonelective deferred compensation provided under a plan in existence on december 31 1987 and maintained pursuant to a collective bargaining agreement.

Section 457 plan. The money grows tax free waiting for you to decide what to do. A 457 b plan is usually available to local and state government workers and those employed by tax exempt organizations. Many large government employers offer both plans.

For the most part the plan operates similarly to a 401 k or 403 b plan with which most. Types of 457 plans. Article table of contents skip to section.

A 457 b retirement plan is much like a 401 k or 403 b plan. For 2015 the 457 contribution limit is 18 000 which is considerably more than the. Section 457 of the 1986 code as in effect before and after the amendments made by section 1107 of the reform act pub.

As 457 plans are nonqualified retirement plans it is possible to contribute to both a 401 k and a 457 plan at the same time. The plan must comply in form and operation with the requirements of the code and regulation. Notably 457 plans are similar in nature to 401 k plans only rather than being offered to employees at for profit companies they cater to state and local public workers.

Under irc section 457 b certain provisions are required and if any optional provisions are intended they must. These plans are non qualified tax advantaged retirement plans and many taxpayers invest in them as a supplemental cushion to their social security and pension income in retirement there are two types of 457 plans. The basics you contribute to a 457 plan via deductions from your paycheck just like with a 401 k or 403 b.

Basics of 457 deferred compensation plans. How a 457 plan works. Generally for years beginning after 12 31 2001 an eligible deferred compensation plan under irc section 457 b or section 457 plan must meet the written plan document requirements.