Eligible employers

[Guest LSULLIVAN]

Can a Credit Union, chartered by the State, be considered an eligible 457b Governmental organization?

[GBurns]

There have been some previous discussions on this. Try a search of the Board.

http://benefitslink.com/boards/index.php?s...=0entry108388

http://benefitslink.com/boards/index.php?s...t=0entry95341

http://benefitslink.com/boards/index.php?s...st=0entry6808

It might be that having a state charter might make a difference. See what the cited PLRs etc have to say. Note the reference in the last of the above links to NCUA rules that might prohibit or limit how this could be funded even if having a state charter allows a 457.

[mbozek]

The IRS issued a PLR last year staing that a Fed Charter CU cannot adopt a 457 plan because it is a fed instrumentality (even though the national CU association had previously received advice that Fed CUs could establish 457 plans). The IRS is working on a response to this issue.

However, under the IRC a fed Credit Union could adopt a non qual DC plan which has the characteristics of a 457(b) plan, (e.g. 14K limit on deferrals) and IRC 409A or could establish a NQDC plan adopted by profit making employers subject to IRC 409A but not 457.

[davef]

The fact that a credit union is state chartered does not mean that it is considered a state government entity -- at least the IRS has never taken that position. Being state chartered basically means that the CU is governed by state CU laws and regulators, rather than federal CU laws and regulators (i.e., NCUA). They are tax-exempt entities under IRC 501©(14).