457 plans - non-profits - excess contributions

[Guest shanna]

I know of exceutives in a non-profit organization who are putting away between $50,000 and $70,000 per year in their 457 plan? How can they do this without violating the limitations rules of $8,000?

[Carol V. Calhoun]

Not knowing the facts, it is hard to tell. They may have a 457(f) plan, in which vesting is delayed in order to delay taxation of the benefits. They may have a funded or unfunded plan in which contributions are immediately taxable (with or without some sort of extra payment by the organization to compensate for the taxes). Their plan may rely on things like mutual fund options or split dollar life insurance, which many would argue are not covered by section 457. Or, of course, they may be ignoring the law.

[Guest bstarr@metlife.com]

SOUNDS LIKE A "MAX.DEF.COMP.", FOR A 501©3.