457

(redirected from 457 plan)
Also found in: Wikipedia.

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 ?
Rather than waiting 10 years to be eligible for an IMRF pension, he said, officeholders can begin participating in the 457 plan immediately and can take that fund with them if they leave office.
PROBLEM: As most of its employees were outside the defined benefit plan, the Government of the District of Columbia recognized the need to supplement their 401(a) holdings with the 457 plan, to ensure they had enough retirement income.
It was a pleasure to be part of the GFOA's conversation about best practices for 457 plan management," said Ken Mergen, Vice President of Group Retirement Plans at RPA.
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.
The reference walks step by step through the life cycle of a 457 plan, explaining how to recognize different types of plans, how to apply eligibility requirements, how to design a plan, how to determine what happens when plans are merged, and how to carry out plan termination.
If the plan is for government employees, then participants can defer (excluding catch-up contributions) an aggregate $33,000 in 2011 between the 457 plan and a qualified 403(b) plan.
Rollovers are permitted to and from an eligible Section 457 plan of a state or local government, a qualified plan, a Section 403(b) tax sheltered annuity, or an IRA.
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.
Recent legislation prohibits rolling over contributions made to a Roth IRA into either a 403(b) or a 457 plan.
Under prior law, distributions from any section 457 plan were characterized as wages, and were not eligible for the $20,000 exclusion (for taxpayers 59 1/2 or older) [Tax Law 612(c)(3-a)].