Mandatory contributions in a 457 plan

[Guest Jim Jesikiewicz]

We see some govermental money purchase plans with mandatory after-tax contributions.

What is the best way to make those mandatory contributions on a pre-tax basis? We were looking at the idea of a 457 plan to take the place of the employee contributions. Can they be mandatory in a 457 plan?

What other concerns should I be addressing?

Thank you for your time.

[mbozek]

The employer can require mandatory participation as a condition of employment the same as it defines the scope of the duties and the employee's salary. the Govt 457 plan could provide for ee contributions of up to 12k including the catch up and that the er contribution will go to a mp plan.

[Guest wjr]

Another alternative would be to amend the plan to have the employer pick-up the mandatory employee contributions under IRC Section 414(h). This would then make the employee contributions pre-tax. By doing this, it would also would free up the entire 457(B) plan for an employee to defer up to the full annual limit without having it reduced by the mandatory amount.