457 Plans

A 457 plan is a deferred compensation program made available to employees of state and federal governments and agencies and certain non-profit organizations. A 457 plan is similar to a 401(k) plan, except there are never employer matching contributions and the IRS does not consider it a qualified retirement plan. Participants can defer some of their annual income (up to an annual limit), and contributions and earnings are tax-deferred until withdrawal. Depending upon the type of 457 plan and the plan agreement, a 457 plan may be rolled over to an IRA under rules that are similar to 401(k) plan rollovers.