Proposed Regs and 457 Plan Amendments

[Christine Roberts]

Are plan document amendments in order, in light of the proposed regulations under 457 and EGTRRA?

I am thinking in particular of eligible governmental plans maintained in states that have conformed income tax laws to EGTRRA limits and provisions.

[mbozek]

Under the regs for 457 plans, govt employers have a period of 6 months after being notified by the IRS of the failure to meet the 457 requirments to bring the plan into conformance with the applicable requirements. However given that the recent changes will benefit the participants, e.g, greater contributions, tax free rollovers to IRAs, transfer to purchase retirement credits, etc. govt employers would want to amend the plans. It is not clear whether the govt plans would need to be amended for the recent changes but instead could just opetrate under the changes until the proper govt body or legislature approved the changes.