Belgarath Posted June 29, 2015 Share Posted June 29, 2015 Since I rarely see a governmental plan, I was just curious if it is a common provision in a governmental profit sharing plan, to offer a matching contribution, which is based solely upon deferrals to the 457 plan? Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted July 26, 2015 Share Posted July 26, 2015 I'd say it's reasonably common. In a 401(k) or 403(b) plan, matching contributions are normally made to the same plan as the employee deferrals, and the 402(g) limit does not apply to the matching contributions. However, in a 457(b) plan, all contributions (not just employee deferrals) count toward the maximum limits. Thus, if matching contributions are made to the 457(b) plan itself, they will reduce employee deferrals. The only way around that is to have a separate plan to which employer matching contributions are made. Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
tax & coffee Posted March 22, 2016 Share Posted March 22, 2016 Is this also permissible in a money purchase plan? For example, an employer elects to have a variable employer match into a 401(a) money purchase plan based upon employee deferrals to a 457(b). Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted March 22, 2016 Share Posted March 22, 2016 Yes, so long as the match is at a rate set forth in the plan, rather than at a rate subject to employer discretion. So if the plan states that there is a 50% match on employee contributions to the 457(b) up to 3% of compensation, you're fine. If the plan states that the employer can decide, in its discretion, whether to make matching contributions each year, you have a problem. Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
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