457 options

[Guest PaulNJ]

being newer to the 457 world , is it possible in a 457b to have only employer contributions and if so can they be formula driven. If not possible do you then have to use a 457f plan?

[TLGeer]

being newer to the 457 world , is it possible in a 457b to have only employer contributions and if so can they be formula driven. If not possible do you then have to use a 457f plan?

Yes, you can. One of the confusing elements of 457 is that it calls contributions deferrals, and that is normally slang for salary reduction contributions. In addition, FICA taxes apply to all deferrals, not just those under salary reduction. However, contributions can be by salary reduction or not. Of course, in a nongovernmental plan the term contributions is misleading, too, because there is not formal funding, not trust or annuity or custodial account other than as a general asset of the employer.

Tom Geer

[Guest PaulNJ]

being newer to the 457 world , is it possible in a 457b to have only employer contributions and if so can they be formula driven. If not possible do you then have to use a 457f plan?

Yes, you can. One of the confusing elements of 457 is that it calls contributions deferrals, and that is normally slang for salary reduction contributions. In addition, FICA taxes apply to all deferrals, not just those under salary reduction. However, contributions can be by salary reduction or not. Of course, in a nongovernmental plan the term contributions is misleading, too, because there is not formal funding, not trust or annuity or custodial account other than as a general asset of the employer.

Tom Geer

thank you very helpful