457

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457

A retirement investment plan for employees of state and municipal governments in which a contributor defers taxation on contributions until after withdrawal. A worker places a portion of his/her pre-tax income into a 457 account and allows it to be invested. Taxation is deferred until withdrawal from the account, generally after retirement. 457s are employee benefits, and workers must have a sponsoring employer, such as a public school or a church, in order to take advantage of one. It is equivalent to a 401(k) and a 403(b); the main structural difference is that 457s may allow for higher catch-up contributions.

457.

These tax-deferred retirement savings plans are available to state and municipal employees.

Like 401(k) and 403(b) plans, the money you contribute and any earnings that accumulate in your name are not taxed until you withdraw the money, usually after retirement. The contribution levels are also the same, though 457s may allow larger catch-up contributions.

You also have the right to roll your plan assets over into another employer's plan, including a 401(k) or 403(b), or an individual retirement account (IRA) when you leave your job.

References in periodicals archive ?
* Revenue Procedure 98-40 (Internal Revenue Bulletin 199832, 6--describes special procedures for obtaining a ruling from the IRS about a section 457 plan.
* the definition of compensation under Section 415 is amended so that deferrals into a Section 457 plan are not taken into account in the limits on retirement benefits paid by qualified defined benefit plans.
This change in the characterization of distributions from government section 457 plans from wages to pension or annuity income permits the exclusion of all or a portion of a distribution from a government section 457 plan from New York taxation.
Through this acquisition, non-qualified services will be available across all of Voya's 401(k), 403(b) and 457 plan markets and offered as an integrated solution when Voya is administering an employer's core defined contribution retirement plan.
Through this deal, nonqualified services will be available across all of Voya's 401(k), 403(b) and 457 plan markets and offered as an integrated solution when Voya is administering an employer's core defined contribution retirement plan.
The PLANSPONSOR 403(b)/457 Buyer’s Guide (page 53) identifies providers of 403(b) and 457 plan administration services.
In 2009, a change in state law made the Colorado Public Employees' Retirement Association the new plan sponsor for a $428 million 457 plan. With this addition, PERA was responsible not only for its original 401 (k) plan, but now a 457 plan and an additional mandatory defined contribution plan.
However, elective contributions must have been made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees.
Also offered, although not as popular, are a SEP-IRA plan (9.4 percent), defined benefit pension plan (6 percent), 457 Plan (3.3 percent) and Money Purchase Plan (1.4 percent).
457 plan Roth contributions: The act allows participants in government Sec.
A plan designed to comply with these rules is referred to as a Section 457 plan.
It pays to start investing early in retirement savings, whether it's a 401(k), 403(b), or Section 457 plan. There's also a practical benefit to having your employer automatically withdraw the money from your pretax salary.