What Is a 457 Deferred Compensation Plan? A 457 plansimply refers to any plan that operates under section 457 of the IRC. Subsection (a) of the code really defines all 457 plans when it says that this plan is only taxable to the participant in the year the money is paid to the part...
A 457(b) deferred compensation plan is a type of tax-advantaged retirement savings account that certain state and local governments and tax-exempt organizations offer employees. Think: law enforcement officers, civil servants, and university workers. When you open a 457(b), typically you set asi...
A 457 plan is a defined contribution plan offered to state and local government employees, as well as employees of tax-exempt organizations. Just like its counterpart, the 401(k) that is available for private sector workers, the 457 is a deferred compensation plan that participants contribute ...
A 457 retirement plan is an employer-sponsored retirement plan, similar to a 401(k), that can be set up for employees of state and local governments or tax-exempt organizations. If enrolled in a 457 plan, a participant can regularly contribute to her retirement savings and also benefit fro...
When Is Deferred Compensation Paid Out? The time until payment depends on the type of plan. A 401(k) plan will be deferred until a government-mandated age, though certain circumstances allow employees to access the money sooner. A short-term bonus plan is one where the payment...
As an employer, offering benefits is advantageous for your business, too. A nonqualified deferred compensation plan is one type of benefit that both you and your employees can enjoy. Find out what a nonqualified deferred compensation plan is, why you might consider offering it, and how to ...
What Is a 457 Retirement Plan? Tax on 401k Contributions Employee elective deferrals to a 401k plan aren't subject to federal income tax. Image Credit:Jacob Wackerhausen/iStock/Getty Images Employee elective deferrals to a 401k plan are not subject to federal income tax, but Social Security an...
What is a pension plan?Question:What is a pension plan?Pension Plans:When employees begin to work for an employer, some of the money they earn is taxed by Social Security to pay for a safety net when they retire. The benefits from Social Security are limited and many of those working ma...
Deferred Compensation vs. 401(k) A deferred compensation plan is generally an addition to a company 401(k) plan and may be offered only to a few executives and other key employees as an incentive. Generally, those employees participate in both plans. They max out their contributions to the ...
Under a 457(f) plan, compensation is deferred from taxation without income limitations. However, this deferred compensation is subject to a "substantial risk of forfeiture," which means executives risk losing the benefit if they fail to meet specific requirements for length of service and performanc...