Top Hat 457(b) and New Deferred Comp Rules

[Christine Roberts]

New deferred comp rules under American Jobs Creation Act do not apply to eligible 457(b) plans. Presumably this means an organization-wide deferred comp plan of a governmental or private tax-exempt employer, and NOT a top-hat 457(b) plan for the executive of a private non-profit; i.e., the new deferred comp rules DO apply to a top-hat 457(b) plan??

[Guest LeeNunn]

The new deferred comp rules do not apply to a Top Hat 457(b) plan. Non-governmental tax-exempt employers are subject to ERISA. Any 457(b) for a non-governmental employer has to meet the Top Hat rules to avoid Title 1 of ERISA.

[Christine Roberts]

I appreciate the comments.

However, here is what led to my query: the legislative commentary on the Act states that "a governmental eligible deferred compensation plan (sec. 457) is a qualified employer plan under the provision" (and hence exempt).

The commentary goes on to say "Plans subject to section 457, other than governmental eligible deferred compensation plans, are subject to both the requirements of section 457, and the provision."

How would a private tax-exempt employer's top-hat 457 plan not be a section 457 plan other than a governmental deferred compensation plan, and hence subject to both the provisions of 457, and the Act?

[mbozek]

P 524 of theConference Report excludes all 457(b) plans from the HR 4520.