Non-Qualified plans for Federal Employees?

[Guest erbok]

Are there such plans? Can federal employees participate in a 457 plan or do those plans pertain to state and local government employees only?

[davef]

Federal employees cannot be covered under a 457 plan. These plans are limited to tax-exempt (nongovernmental) employers and state and local governments. It's my understanding that the reason no Federal employees are covered under a nonqualified deferred comp plan is due to the full faith and credit rule, which says that the US Government stands behind its promises to pay -- which means that any amounts set aside would never be subject to creditors' rights and there would be taxation under the economic benefit doctrine.