Client is 70yrs old and still working. Stepped down from CEO and accepted an alternate occupation within the same charitable non-profit organization.
He has an employee deferred comp plan…I think it is a 457 plan.
Thank you
Douglas
the 457 definitions (I know you are the expert but just checking) states for: retirement savings plan for many state, local government, and some nonprofit organization employees.
so, if it’s a nonprofit organization, why can’t it be rolled over to an IRA?
Can it be transferred to another annuity as a 457 (employee deferred comp) without being taxed?
it doesn’t say on the quarterly statements a 457 plan but only an “employee deferred comp”, does that make a difference?
Thank you
Doulgas
There are several differences between a govt 457b and a non govt 457b, with the govt plan being more like qualified plans. One of those differences is that a non govt plan cannot be rolled into an IRA or any other qualified plan. While it’s apparently a hassle it can be rolled into another non govt 457b plan, which is the only way to move funds without creating a taxable event.
The term “employee deferred comp” is a very general term that can encompass several types of plans. To be sure what type of plan client has, he should ask the administrator what IRS code section the plan has been established under.
Another possibility is that as an executive client participated in a 457(f) plan reserved for upper management. These plans are similar to non govt 457b plans, eg cannot be rolled over and the balance is not held in a separate trust, rather is part of the employer assets which are subject to employer’s creditors.
Permalink Submitted by Alan - IRA critic on Wed, 2024-10-30 15:49
The only type of 457 plan that can be rolled over to an IRA is a govt 457b. Since the employer is a charity, this plan is not eligible for rollover. The plan provisions determine the distribution options.