What are the benefits?

  • Easy to administer
  • Low plan administration costs
  • Employer and executive may contribute to the plan
  • Helps attract and retain valued executives
  • Contributions are made with pre-tax dollars
  • Earnings compound tax-deferred
  • Earnings are paid when the executive is likely to be in a lower tax bracket

Factors to consider:


Who is eligible for the plan? (Note: Only highly compensated employees or a select group of management employees are eligible for 457(f) plans.

  • Who will be eligible to be in the plan?
  • What age will they be eligible for the payouts?
  • Will IRC 4960 impact the expense?
  • How do you determine contribution levels?
  • Who will administer the plan? Often finding someone to administer a 457(f) plan can be difficult
  • Will the payouts begin at the normal retirement age, a retirement age earlier than age 60, or will retirement be deferred with payments at a future date? (Remember, mandatory retirement may apply to certain “bona fide” executives. That group may or may not include executives eligible for these plans.)