Yes. A non-governmental 457(b) does require a written plan document. Unfortunately, there are no IRS pre-approved plan documents for non-governmental 457(b) plans. Nova 401(k) Associates provides plan documents.
The biggest reason that a tax-exempt employer would offer a 457(b) plan is higher deferral limits. Without regard to catch-up limits, the most an individual can defer to a 401(k) plan in 2014 is $17,500. A 457(b) plan may allow the employee to defer an additional $17,500! This can be a real perk to higher … Read more
The organization must be a tax-exempt organization under IRC 501(c), excluding churches as defined under IRC 3121(w). The most common example of a non-governmental organization sponsoring a 457(b) plan would be a charity which is tax-exempt under IRC 501(c)(3). Other examples include certain credit unions, country clubs, civic leagues and other groups organized under IRC … Read more
A 457(b) plan is a type of non-qualified tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers. The employer provides the plan and the employee defers compensation into it on a pre-tax basis. Sometimes the employer also makes contributions.
In 2006, Congress signed the Pension Protection Act which made some changes to the rules governing the operation of pension plans and significant changes to the funding rules for defined benefits plans. For most defined benefit plans and cash balance plans, this has resulted in two amendments to their plan: A PPA amendment (adopted usually … Read more
Assumptions Unless otherwise disclosed on the illustration, here is a summary of the actuarial assumptions that Nova 401(k) Associates uses: Interest rates for minimum required contribution – MAP-21 rates Interest rates for the maximum deductible contribution: Segment rates with a two month lookback Pre-retirement decrement assumptions: None Retirement assumption: 100% at normal retirement age Percentage of … Read more
Nova 401(k) Associates is pleased to announce the following individuals have joined us: Bonnie Post, ERPA, QPA, QKA – Colorado – Consultant/Team Leader Bonnie started with Nova on May 8, 2013.. Bonnie graduated from Pennsylvania State University with a B.S., Quantitative Business Analysis. She brings with her more than 20 years of industry experience and … Read more
Another hurricane season is upon us! The Atlantic hurricane season begins June 1st. The IRS offers these suggestions for preparing for a natural disaster: • Safeguard records – Make backup copies of important records and store the backup separately from the originals. Consider using electronic backup copies.• Inventory belongings – Create an inventory of possessions … Read more
Governmental plans are exempt from PBGC coverage under the ERISA. Opinion letter 96-3 gives guidelines from the ERISA section (4021)(b)(2) for determining if an organization is a government employer.
A common compensation error in 401(k) plans is not applying the maximum compensation limit of IRC401(a)(17). Of course, there is no limit on the compensation that can be paid to an employee, but thereis a limit on the amount of compensation that can be considered for 401(k) purposes. At no time can a