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Church 403(b) & 457 plans


Guest lwhittle
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Guest lwhittle

Can a church-controlled organization maintain both a 403(B) and a 457 plan? What are the advantages/disadvantages of doing this? I have a church employer with an existing ERISA 403(B) plan that is asking about putting in a 457 for a select group of management employees.

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Guest tthurston

Churches and Qualified-Church Controlled organizations (QCCO) may not maintain a section 457 plan - they are excluded from 457 in the code. A Non-Qualified Church Controlled Organization (NQCCO) (college, university, hospital, nursong home, etc) may sponsor a 457 plan.

If your church plan sponsor is a church or church controled organization they may sponsor a non-qualified deferred compensation plan that could be funded with mutual funds or COLI. This plan could be structured as an excess plan with excess 402(g) and 415 contributions automatically placed in the excess plan and would not have the restrictions on contribution amounts that 457 would have.

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