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Are there any other options for a local gov. 457?


Guest ksadler
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Guest ksadler

Other than a 457 plan, can a local (city) government offer a plan where the city matches the employee's contribution and the employee not be taxed in the current year for this matched portion? Also, is there any "loop-hole" out there where a governmental employee can exceed the $8000 limit, keeping in mind that the city also wants to contribute? I saw something on the fact that the matched portion can be pre-taxed and the ee contribution is after-tax but deferred.

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A 403(B) would not be available for a city government, since the employer must be an organization tax-exempt under Code section 501©(3), or a public school or university. A city government would be neither. Of course, if the city also runs the schools, employees of the schools could be covered by a 403(B).

I would concur in Everett's suggestion, if permitted by applicable state and local law. A 457 plan for pretax employee contributions, plus a 401(a) plan for the employer match, is usually the best combination if the city is not eligible for a 401(k) plan under the grandfather rules.

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.

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