Alex

I stand corrected and my apologies!

1) The 1st stack is the same as in a regular safe Harbor match plan. I.e., the basic match of 100% of first 3% deferral plus 50% of the next 2% for a max of 4%. Alternatively you can use an enhanced formula of 100% of first 4% deferral and again the max match is 4%. 2) Your other stack maximums are fine: max Fixed match can max out at 6% and optional max maxes out at 4%. 3) I can try and get you something written later but currently answering this while in cpe.

I believe your Stack 1 should be limited to 4%.

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Thank you both for your responses! It is appreciated!

Not For Profit (NFP) sponsor of 457b plan permits retired participants to either take a lump sum distribution or equal payments over a 10 year period after retirement. For those who take the lump sum option, this distribution amount is included in their final issued W-2 as they are still on payroll. The instructions for W-2 indicate that distributions from a NFP 457b plan are to be reflected on a W-2. If retired employee is no longer employed by the NFP, is the NFP still to report the annual distributions on a W-2 with required withholding or are there any other options? (1099Misc??) Thanks

In NFPs a 457(b) plan is generally limited to 20% (again general rule) or less of work force so if there are only 5 employees, you would be limited to 1 or perhaps 2 participants under circumstances you would have to get the IRS to buy off on.. These participants would be from a "select group of employees" or Highly Compensated Employees as IRS calls them). The HCE definition for 457(b) plans for NFPs is not the same as the HCE definition for qualified plans.

457(b) plans can also be set up for NFPs (not for profit) orgs and a charity would normally fit this mold. Most TPA firms have access to building 457(b) documents. I am not soliciting business, but I use Ft William for my 457(b) documents and I know that Relius also has 457(b) documents for NFPs. Obviosly TPAs are in business to make a living so they are not free.

Austin3515, Can you provide me with a copy of the form letter you use to respond to the IRS in these situations that you mentioned in your first comment. The same situation came up today with one of my clients and this is the first time I have experienced this. Thanks Alex alexdimuropda@yahoo.com

You have obviously done your homework as the key to making this work is your reference to “non-IRS Prototype”. You can’t do it with a 5305-SEP Form.

When I used to do SARSEP presentations, I would start out by saying "you show me an in-house administered SARSEP and I will show you a Disqualified Plan". In addition to the reasons listed in the other responses, most do not understand how to determine the date when an employee first becomes a participant when other than 0 years is selected when using the 5305A-SEP.