1. 457(F) PL ANS OVERVIEW
This overview intends to provide an overview of federally imposed retirement plan rules as they relate
to and affect tax-exempt employers sponsoring 457(f) plans. The laws of the employer’s state of
domicile should also be consulted. This information is general in nature and is not intended to replace
the guidance of counsel on specific issues.
Provision 457(f) Plan Rule
Eligible Employers Tax-exempt employers desiring to provide a supplemental benefit to certain
executives, usually conditioning benefits on the performance of services.
Eligible Employees and Participation is generally limited to specific key executives, highly compensated
Participation employees or a select group of management.
Employee and Employer Contributions are generally unlimited. Most typically, only employer contributions
Contributions are made. After-tax contributions are not permitted. Once invested, funds become
assets of the employer and are subject to claims of the employer’s creditors.
Benefits must be subject to a substantial risk of forfeiture, which lapses at the
occurrence of a specified event.
Catch-up Contributions Not applicable because contributions are unlimited.
Roth Contributions Not allowed.
Section 402(g) Deferral Does not apply. Most typically, 457(f) plans are designed for employer rather than
Limit employee contributions.
Section 415 Contribution Does not apply. Contributions are unlimited.
Limit
Section 401(a)(17) Does not apply. Employer contributions do not need to be capped at any particular
Compensation Limit compensation level.
Written Plan Document Required.
Prototype Plan Document Not available.
Program
Determination Letter Not available.
Ownership Plan assets are employer-owned subject to a substantial risk of forfeiture so that
contributions are not immediately taxable to the participant. Assets must be subject
to the claims of the employer’s general creditors. A rabbi trust may be used, but is
not required.
Vesting Any compensation deferred must be subject to a substantial risk of forfeiture and
cannot simultaneously be vested in a benefit and remain tax deferred. Vesting
occurs upon a lapse in substantial risk of forfeiture.
Loans Not available.
QDROs QDRO rules do not apply to 457(f) plans, but the plan document may otherwise
provide for account division incident to divorce.
Distributable Events Participants may receive a distribution at disability, death, separation from service,
a time specified in the plan, a change in control, unforeseeable emergency, or when
there is no longer a substantial risk of forfeiture.

2. Distribution Options Distribution options are as permitted by the plan; lump sum distributions are
typically made to the employer when the substantial risk of forfeiture lapses.
Early Withdrawal Penalty Not applicable.
Rollovers Not permitted.
Minimum Required Does not apply. Instead, participants must receive distributions when the
Distributions substantial risk of forfeiture lapses, as specified in the participation agreement
and/or plan document.
Taxability Amounts are taxable when the substantial risk of forfeiture lapses, at which time the
entire account is immediately subject to FICA, FUTA, state and federal income
taxes. Taxable amounts are reported by the employer on Form W-2.
Section 401(a)(4) and Does not apply.
401(m) Nondiscrimination
Testing
Section 410(b) Minimum Does not apply.
Coverage Testing
Section 416 Top-Heavy Does not apply.
Testing
ERISA Coverage ERISA does not apply to excess benefit plans, but it may form the basis of plan
governance best practices.
Form 5500 Filing Does not apply, but plans adopted by nongovernmental employers must file a one-
Requirement time exemption statement with the Department of Labor.
Multnomah Group, Inc.
Phone: (888) 559-0159
Fax: (800) 997-3010
www.multnomahgroup.com