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Can a participant elect out of a 457 plan (like a 401(k))?

Guest LBH

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Can a participant elect out of a 457 plan (like a 401(k))? My husband is a Teacher employed by the state (MA) participating in a state retirement plan and is working part time after school and has been told that he must particate in the 457 plan sponsored by the part time job.

Thank you!

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Guest Ralph Amadio

I am presuming that your husband is a member of an 457 alternative to Social Security since its sounds as though it is a mandatory plan for part time, seasonal or temporary PST) employees. If he is in fact, eligible for coverage as a part-timer, he must belong to the mandatory plan, particularly if there is no opting out to participate in Social Security. Check with the employer to determine if the plan is 1. a PST alternative plan, 2. Is he in an eligible class, 3. Is a mandatory 457 plan permissible in your state (in ours it isn't, salary reductions must be voluntary)and 4. Does the plan meet all of the final regulation requirements of 3121(B)(7)(F) of the IRC.

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Guest PeterGulia

I am the tax lawyer for Copeland Associates, Inc., which is the Plan Coordinator serving under contract with the Commonwealth of Massachusetts State Treasurer's office.

Massachusetts law specifies the part-time employments that require mandatory participation in the 457(B) deferred compensation plan.

If your husband will call or write the Plan's HELPLINE (the 800 number is on the enrollment form he signed), the HELPLINE Counselor can refer your inquiry to me. Please feel free to mention that I wrote to you on BenefitsLink and say that I specifically asked that your inquiry be referred to me.

If there is any written information about your husband's part-time employment that will help us apply the Massachusetts law, you or he may send your inquiry to me at

Peter J. Gulia

Copeland Associates, Inc.

Two Tower Center

East Brunswick, NJ 08816


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