Church 457(b) Plan

[oldman]

It is my understanding that a IRC §414(e) religious organization may sponsor a 457(b) unfunded plan for the rank and file. May church 3121(w)(3)(A) or 3121(w)(3)(B) organizations also be permitted to sponsor such a plan?

[jpod]

With all due respect you're not looking at 457 correctly. 457 is a restrictive rule, basically saying that if you are subject to 457 your employees cannot defer taxes on vested compensation unless it is done in accordance with 457(b). Employers described in 3121(w)(3)(A) or (B) are not subject to 457. Therefore, they can structure deferred compensation without regard to 457, including 457(b), just like a for profit entity.

[QDROphile]

If the arrangement is exempt from ERISA, it must still consider securities laws.

[FormsRstillmylife]

As a non-profit, the church plan would be subject to 457(f).

[jpod]

FormsR: Not correct, for the reason I stated.