Search the Community

Hi. I am looking at a 457(f) plan that permits after-tax contributions. Please help me - why would a person want to give their already-taxed compensation back to the employer? Deferral of taxation on earnings for a few years does not seem to warrant the risk of the sponsor's bankruptcy. What am I missing? Thanks! This board'S moderators and contributors are the best! P.S. All I could find on Google and elsewhere was a GuideStone plan adminstrator's guide that had a reference to 457(f) plans that permit after-tax contributions.

I recently came across an article (here) which suggested that including independent contractors in governmental 457(b) plans could cause those plans to lose their ERISA exemption. The author contends that, while independent contractors are permitted to participate in 457 plans, the ERISA exemption applies to "governmental plans," which are defined in ERISA 3(32) as plans that cover employees. (He acknowledges that plans that cover only independent contractors would be exempt in their own right because they don't cover any employees, but indicates that the governmental employer must maintain separate plans for employees and independent contractors in order for them both to be exempt from ERISA). While I follow his logic, I can't say that I've seen any other support for (or even discussion of) this position. Does anyone else agree or disagree with his position?

Can a Fire District set up a 401k plan? Or does it have to be 403b or 457? It is a political subdivision of a Town and they, as a governmental entity, have the authority to assess taxes. It is not a tax-exempt entity granted exemption from income tax under IRC section 501(C). Thank you.

Is Self Correction available to a Governmental 457 Plan that has a participant that exceeded the annual deferral limit for the past 10 years?

When are the employer match contributions subject to FICA taxes? Is it when distributed or when contributed to the plan? This plan has a 2/20 vesting schedule. Thank you!

We have a public school that has a 457 plan paired with a 401(a) plan. They are asking if the 2 plans can be merged together. Is this permissible?

I am having a difficult time decoding how to distribute a loss. We have an employee who deferred $1,000 into his 457 plan. The plan allows $18K in contributions for the year, which can be a combination of employee and employer monies. In December we forecast that the employer contribution for the year would $18K. Our practice is to maximize the employer contribution first, thus we wanted to return to him his deferral amount. The $1,000 was returned to him via a negative contribution in December on his payroll. We did this in order for the w-2 to show that he did not contribute the $1,000. After the return we calculated the gain/loss, and found that the $1,000 deferral he put into his account had shrunk to $900. This $900 was moved out of his account into what we call the negative account at the recordkeeper. I understand that the excess deferral instructions state that the excess deferral plus any income allocable must be distributed out. We've taken a conservative view and determined that "income" includes losses as well as gains. In order to distribute the loss to the participant, my thought is that we now instruct the recordkeeper to move an extra $100 out of the account. This would in effect make the loss realized in his account, and thus would mean the loss was allocated (I think). Not sure if this is the best way, or only way, to administer. Would appreciate any insights. Thanks.

On October 21, 2015, the IRS issued IRS News release 2015-118, announcing the changes in pensions and benefits limits for 2016. Most limits were unchanged. An updated chart, showing these limits for 1996 to 2016, is available by clicking here.

Are you able to roll money out of a qualified 457 plan into an IRA , even if the 457 plan is not related to a goverment but to a non-profit? I found some language that rollovers are only permitted for 457 plans under a state or local govemnment but not a non-profit.

We have a university client with professors who are eligible to participate in a 457(f) plan. The professors work on a 9 month contract, but may elect to be paid over a 12 month period. The university has historically required the professors who elect to particpate inthe 457(f) plan to be paid over a 9 month period instead of 12 months. They indicate that this is a 457 regulation requirement. Can someone please provide me with guidance as to whether this is an actual requirement, or simply university policy?

We have a former employee that has submitted paperwork from a 403(b) providor, to move her Ohio Deferred Comp funds (457)to the 403(b) providor. Wouldn’t she need to contact Ohio Deferred Comp to start the process to move funds from her 457 to that providor? I am not sure what role we as an employer would have for her moving funds from OHDEF to a 403(b) account. Are there IRS regulations that require the employer to be involved in distributions of a governmental 457? Thank you,