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The 457 plan is a type of nonqualified, [1] [2] tax advantaged deferred-compensation retirement plan that is available for governmental and certain nongovernmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre tax or after-tax (Roth) basis.
By contrast, Non-Qualified Deferred Compensation (NQDC) plans are ones that don’t meet the requirements outlined in the ERISA and have no contribution limits and more flexible withdrawal rules.
The 457(b) retirement plan offers many advantages to government workers, including tax-deferred growth of their savings, but these plans do come with some drawbacks. ... Withdrawals from 457(b) plans.
Tax-deferred. Tax-free. Contribution Limits-$7,000 (under age 50) ... Many plans offer Roth IRA option with contributions made after tax and withdrawals are tax-free. 457(b): ...
Deferred compensation is an arrangement in which a portion of an employee's wage is ... and 457(b) (for state and local ... which he will have the right to withdraw ...
Section 409A of the United States Internal Revenue Code regulates nonqualified deferred compensation paid by a "service recipient" to a "service provider" by generally imposing a 20% excise tax when certain design or operational rules contained in the section are violated. Service recipients are generally employers, but those who hire ...
The movement of funds from a 457(b) plan to an IRA, typically tax-free if completed within 60 days, is actually shifting money from one tax-advantaged account to another.However, any distributions ...
EGTRRA allows, for the first time, for participants in non-qualified 401(a) money purchase, 403(b) tax-sheltered annuity, and governmental 457(b) deferred compensation plans (but not tax-exempt 457 plans) to "roll over" their money and consolidate accounts, whether to a different non-qualified plan, to a qualified plan such as a 401(k), or to ...