Section 457 Plans
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Attention: Agents & Brokers

Do you work with employees of state, county, local and municipal governments, other government agencies, nonprofit corporations, public schools, county hospitals, community colleges and universities? If so, we’re looking for experienced agents to work this often overlooked market.

457 Deferred Compensation Plans

Eligible Organizations:

  • State and Local Governments
  • Non-Profit 501(c) Organizations
  • Public Schools

457(b) Typically is Used For Employees

  • No Longer Tied to TSA
  • Limits Contributions
  • Allows Rollover Provisions
  • Variety of Funding Options

457(b) Contribution Limits*

  • 2009 ... $16,500
  • Plus $5,500 Catch-up if Over Age 50
  • 2010 and Beyond...Subject to cost-of-living increases

Special Catch-Up Contributions

  • Three Years Prior to Normal Retirement
  • Twice The Annual Contribution Limit

*Refer to the IRS Web site at for more information regarding these plan limitations.

457(b) Participation Requirements

  • Dictated by Adoption Agreement
  • Typically for Full-Time Employees
  • Restrict Part-Time
  • Restrict Foreign Nationals
  • Restrict Leased Employees

457(b) Requirements

  • Must have Written Program
  • Trust* must be in place
  • Must have Trustee for Life Insurance
    • Trustee is Owner
    • Trustee is Beneficiary
  • Participant Access to Plan Provisions

*If the 457(b) plan is maintained by a state, political subdivision of a state or a state agency, the assets must be held in trust for the “exclusive benefit” of plan participants and their beneficiaries

457(b) Funding Requirements

  • May use Life Insurance or Annuity Contracts
  • Must not offer Life exclusively
  • No “incidental” rules on Life Premium

457(b) Funding Options

  • Fixed Annuity
  • Variable Annuity
  • Universal Life Insurance
  • Index Universal Life Insurance
  • Whole Life Insurance

457(b) Participant Termination

  • Assets may be taken in cash
  • Assets may be rolled to new 457 Plan
  • Assets may be rolled to another Qualified Plan (may have restriction on investments)

Establishing a 457(b) Plan

  • Complete and submit forms:
    • Contract Application
    • Copy of Plan’s Adoption and Trust Agreement
    • Service Agreement
    • Plan sponsor user’s and Web user’s Set-Up Form
    • Sample Installation and Payroll Remittance file on Web

Some states require that 457(b) plans be filed with a governing state agency. The employer should consult with its legal or tax advisor on its specific circumstances.

Send Completed Data to:

    Life Solutions, Inc.
    Attention: Pension Department, 457
    PO Box 862
    Dodge City, KS 67801

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