457 Plan Information
Offer employees a flexible retirement savings option with the 457 plan
Changes in tax laws initiated by the Economic Growth and Tax Relief Reconciliation Act of 2001, have made 457 plan retirement accounts increasingly attractive for non-profit organizations. These accounts can now be rolled over, and thus may be viewed as an enticing option for retirement planning. Human resources personnel who seek help with 457 plan implementation and management will be in a position to offer more attractive benefits packages to increase recruitment and employee retention.While a 457 plan works much like 401(k) plans with pre-tax contributions and rules concerning withdrawing funds, there are many differences in the plans that employees may find appealing. To efficiently present this information, human resources personnel may require 457 plan training to develop plans that employees will view as assets to their overall retirement portfolio. The following information should be gathered before developing 457 plans:
1. Pros and cons of the 457 plan;
2. Available investment options;
3. Distribution timetables and rules.
Seek out 457 plan advice
To tailor plans to the needs of employees, benefits personnel should secure the assistance of a 457 plan consultant with experience in managing a variety of retirement plans. An effective method for choosing vendors for your company is to solicit a Request for Proposals (RFP).
Try: Donald J. Puff, Financial Advisors offers 457 plan information and consulting. They include the U.S. code outlining the plan on their website. Advanced Corporate Planning also provides consultation services as well as a detailed frequently asked questions diagram of the 457 plan.
Explore 457 plan information for employee flexibility
There are online resources devoted to answering questions about rollovers; contribution limits (and exceptions to limits for those close to retirement); and when and how funds can be withdrawn.
Try: Teachers Insurance and Annuity Association--College Retirement Equities Fund (TIAA-CREF) are retirement specialists that focus on providing services for "academic, medical, cultural and research fields," including 457 plan management. 457.com is the online home of retirement specialists that offers an online 457 community providing email updates of current information on these retirement accounts. 457(b)wise also offers a beginner's guide focused on 457 plan information that includes articles and access to a discussion board.
Turn the 457 plan advice into an employee recruitment and retention tool
Promote the multiple benefits of the 457 plan (three-year catch-up contributions; no penalty for withdrawal before age 59) to employees to encourage competitive applicants and to retain highly productive current employees.
Try: 403(b)wise, which offers guides on 457 plans, is operated by bWise Guys, a firm that specializes in retirement education and advocacy for teachers. American International Group offers advice and tools to assist employers in presenting the 457 plan benefit to employees.
- Part-time employees and independent contractors can participate in your 457 plan. Offering this plan in a modified benefits package may reduce high turnover of employees who fall in this category.
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