Multiple Extensions of 457(f) SROF

457(f) plan provides for substantial risk of forfeiture solely on the condition that the participant perform substantial services for the employer through the initial or extended vesting date. In addition, the plan permits participant and employer to agree to an extension of the substantial risk of forfeiture in accordance with the requirements of the proposed 457(f) regs.  More than 90 days before the initial vesting date of January 1, 2020, the parties in fact agree to a materially greater benefit that will vest on January 1, 2022.

It would seem that the proposed regs would permit the participant and the employer to once agree to extend the risk of forfeiture in the same fashion provided they enter into the agreement at least 90 days prior to the January 1, 2022 vesting date. Yet, there is no explicit statement to that effect and all of the examples provided only deal with the first extension.

Any limitations on (or traps inherent in) doing a second extension?

kgr12, I agree with your analysis of the hypothetical.

I believe the "materially greater" extension requirement is under 409A, whereas 457(f) specifies that the present value of the benefits as of the extended vesting date must be at least 125% of the value of the benefits had the vesting date not been extended.

51 minutes ago, FPGuy said:

I believe the "materially greater" extension requirement is under 409A, whereas 457(f) specifies that the present value of the benefits as of the extended vesting date must be at least 125% of the value of the benefits had the vesting date not been extended.

FPGuy, both the 409A regs and the proposed regs for 457(f) use the term "materially greater." 409A regs leave to facts and circumstances, whereas 457(f) proposed have the 125% rule, and state in preamble that this does not imply that 125% is the right number for 409A.