408b2 and 457(b) tax exempt

[Guest ebgroup]

Has anyone decided if these are plans for purposes of the regulations? It looks like if they are unfunded excess benefit plans they are not. I know they are unfunded but do not know if they are excess benefit plans. Can someone point me in the right direction.

[Belgarath]

I think they are exempt under DOL reg. 2520.104-23 as a "top hat" plan if you you are talking about a tax-exempt entity.

[mbozek]

Has anyone decided if these are plans for purposes of the regulations? It looks like if they are unfunded excess benefit plans they are not. I know they are unfunded but do not know if they are excess benefit plans. Can someone point me in the right direction.

While a 457b plan is unfunded because its assets are subject to the claims of the employer's creditors and are not kept in a trust, the benefits must be limited to select group of management or highly compensated employees. If rank and file employees participate then the assets must be held in taxable trust and are subject to the rules for ERISA plans which would result in the taxation of contribuitions to the participants.