Jump to content

457(b) Governmental vs Private?


Guest Monster
 Share

Recommended Posts

Guest Monster

Can an employer that identifies itself as having a 457(B) plan be either Governmental (thus subject to the SBJPA) OR a Private/Top Hat plan? I'm pressed for time and struggling to find a black & white answer. Any help would be appreciated.

Link to comment
Share on other sites

Yes. (Is that black and white enough for you? :) )

Code section 457(B) permits either a state or local government, or a tax-exempt organization, to maintain a 457(B) plan. However, the 457(B) plan of a tax-exempt nongovernmental employer's plan is required to be unfunded under section 457(B), while that of a governmental employer is required to be funded under 457(g). A tax-exempt organization will nevertheless often maintain a trust fund or annuity contract to hold 457 plan assets, but the trust fund or annuity must be set up in such a way as to be subject to the claims of the employer's creditors (e.g., a "rabbi trust").

Morover, because of ERISA restrictions, a nongovernmental 457 plan must be a top hat plan. By contrast, many governmental 457 plans cover rank and file employees.

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

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...