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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 employer provides the plan and the employee defers compensation into it on a pre tax or after-tax (Roth) basis.
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.
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 LOSAP is exempt from Internal Revenue Code §457 as a result of the passing of the Small Business Job Protection Act of 1996 on August 20, 1996. This bill amended §457 (e) (11) of the Internal Revenue Code with language that excluded “any plan paying solely length of service awards to bona fide volunteers…” [1]
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 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.
Deferred compensation is a way for employees to reduce their tax burden while ensuring their economic security in their golden years. Deferred compensation plans with a long vesting period are ...
EGTRRA allows, for the first time, for participants in non-qualified 401 (a) money purchase, 403 (b) tax-sheltered annuity, and governmental 457 (b) deferred compensation plans (but not tax-exempt 457 plans) to "roll over" their money and consolidate accounts, whether to a different non-qualified plan, to a qualified plan such as a 401 (k), or ...