The 457 non-governmental plans must remain unfunded. The assets of the plan are not held in trust for the workers, but remain the property of the employer (available to its general creditors in the event of litigation or bankruptcy). Non-governmental plans 457(b) often use ”rabbi trusts” to prevent personnel transfers. The rabbin trust is funded, but the trust remains available to creditors. Workers have a lower priority than general creditors for rights against the employer. Non-government plans 457(b) (”Top Hat”) must limit participation to groups of highly compensated employees or groups of executives, executives, directors or senior executives. The plan may not cover ordinary employees. Contributions to 457 (b) plans may include workers` wages and employer contributions. Contributions are reported on Form W-2. Non-governmental plans 457 (b) (Top Hat) must submit a notification of the existence of the plan to the Ministry of Labour. Non-governmental 457 plans can be restored by tax-exempt organizations: selected group of highly compensated executives or employees Although there is no formal legal definition of a ”group of highly released executives or collaborators”, this usually represents a small percentage of the employee population: IRC Section 457 plans, which are not required to submit Form 5500, as they are not included in Title I submitted to ERISA.
Exempt non-governmental enterprises may establish 457 (f) (non-eligible) plans that are deferred and allow contributions exceeding the annual carry-over limit. These plans and related deferrals are only possible if there is a ”significant risk of loss” – if the risk is eliminated, the subscriber`s deferral amounts become taxable. Section 457 of the Domestic Income Code provides for favourable tax treatment for certain unqualified deferred compensation plans. A 457 sponsor must be either: over the years, the courts and the Ministry of Labor have considered one or more factors:. . .