Recharacterize 457b top hat to governmental?

[30Rock]

Situation is that dual status county hospital adopted a 457b top hat plan. Some kind of misunderstanding with the 501©(3) status and governmental status. So now they propose to convert the tophat plan into a governmental plan, to avoid plan termination and taxation to the executives. I am unclear on how to convert an unfunded top hat plan. I could see freezing the plan and allowing payouts as employees terminate, and adopt a new 457b governmental plan.

Does anyone have any thoughts and any other ideas?

Thanks!!

[Peter Gulia]

If the facts are those that I suspect (I've been to this movie too many times), there are stronger solutions. I'm willing to explain them, but not on a public bulletin board that anyone could read. If you'd like to hear the ideas, please call me at the number shown below.

[mbozek]

Situation is that dual status county hospital adopted a 457b top hat plan. Some kind of misunderstanding with the 501©(3) status and governmental status. So now they propose to convert the tophat plan into a governmental plan, to avoid plan termination and taxation to the executives. I am unclear on how to convert an unfunded top hat plan. I could see freezing the plan and allowing payouts as employees terminate, and adopt a new 457b governmental plan.

Does anyone have any thoughts and any other ideas?

Thanks!!

See Reg 1.457-10(a)(2)