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The 457 plan is a type of nonqualified, [1] [2] tax advantaged deferred-compensation retirement plan that is available for governmental and certain nongovernmental employers in the United States.
The 457 (b) retirement plan offers many advantages to government workers, including tax-deferred growth of their savings, but these plans do come with some drawbacks.
Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a later date after which the income was earned. Examples of deferred compensation include pensions, retirement plans, and employee stock options. The primary benefit of most deferred compensation is the deferral of tax to the date (s) at which the employee receives the income.
Section 409A makes a distinction between deferred compensation plans and deferral of compensation. The term "plan" includes any agreement, method, program, or other arrangement, including an agreement, method, program, or other arrangement that applies to one person or individual.
A 457(b) retirement plan is a tax-advantaged saving scheme available to government and certain non-profit employees. It allows participants to defer income taxes on retirement savings until the ...
Deferred compensation plans are either qualified or non-qualified plans. Which one you have will affect how your plan’s funds are treated if you quit.
Lawmakers are considering a bill to move the attorney general into the more lucrative Judges and Solicitors Retirement System and out of the South Carolina Retirement System.
The DCP is an Internal Revenue Code Section 457 (b) plan and allows eligible state employees to supplement retirement benefits by investing pre-tax dollars through voluntary salary deferral. [4] Employee contributions are deposited in the DCP and federal and state taxes will remain deferred until contributions are withdrawn.