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Definition of a 457 plan:
A 457 plan is a nonqualified, deferred compensation plan established by state and local governments and tax-exempt employers. With a deferred compensation plan you postpone receiving a portion of you salary to be received at a later date. In many cases, employers that allow employees to participate in 403(b) plans also offer 457 plans to their employees.
457 plans offer the following features:
· a "standard" 457 catch-up provision,
· the unique ability to withdraw account savings before age 59 1/2, after separation from service, without a 10% early withdrawal penalty, and
· the flexibillity to consolidate retirement accounts.
· higher annual contribution limits, and
· The flexibility to consolidate retirement accounts.
Contact your Plan Administrator to learn if your current employer deferred compensation 457 Plan has been amended to include the new changes.
Disclosures
Many tax provisions are scheduled to expire in 2006 through 2010 unless extended or made permanent by Congress.
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