What is a 457(b)?
Section 457(b) of the Internal Revenue Code provides an exclusion from gross income for a certain portion of salary deferred by participants in the deferred compensation plans of state and local governments and certain tax-exempt organizations. The earnings on the deferrals inside these plans are also excluded from the participants’ current gross income.
Participation in a Section 457(b) plan is restricted to persons who perform services for an eligible employer, including:
-Part-time and seasonal employees
Maxium Deferral Amount
Deferral limit Deferral Limit
Year Under age 50 Age 50 and Over
2008 $15,500 $20,500
2009 $16,500 $22,000
2010 $16,500 $22,000
2011 $16,500 $22,000
Distributions from a Section 457(b) plan may not be made earlier than:
-Calendar year in which the participant reaches normal retirement age
-Employee seperates from service
-Unforeseeable emergency (casulty loss and financial hardship)
The information above is for sole purpose of information only and is not intended or is in anyway a contract.
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