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
403(b) or 457 plan
, a Keogh plan and/or a traditional IRA.
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)].