457 Plan Contributions 

What is the maximum 457 Plan Contributions? How much can a participant contribute to a 457 Plan?

The max 457 plan contributions are generally the lesser of a percentage of compensation or $14,000 in 2005 (increasing by $1,000 per year to $15,000 in 2006) for selected employees to defer.

The max 457 plan contributions limit determined by the 457 plan is up to the lesser of 100 percent of the participant's includible compensation or the applicable dollar amount for the year.

For the last 3 taxable years before the participant attains normal retirement age under the 457 plan, the ceiling is the lesser of twice the applicable dollar amount for that year or the sum of the applicable dollar amount for that particular year plus the amount of the 457 plan ceiling for previous years that has not been used.

Can catch up 457 plan contributions be made to a 457 Plan?

For 2005 participants age 50 or older may contribute an additional $4,000 known as a catch up 457 plan contribution.

The catch up max 457 plan contributions amount increase by $1,000 each year until it reaches $5,000 in 2006.

When can a participant take distributions from a 457 Plan?

457 plan distributions rules are determined by the plan and generally must not begin before the year in which the participant

    * reaches age 70½,

    * leaves the employer, or

    * has an unforeseen emergency.

A 457 Plan generally offers annuity distribution options.

Are 457 Plans subject to the sunset provisions of EGTRRA?

The new 457 plan IRA rollover rules and the increased max 457 plan contributions levels described above will be automatically repealed for years after 2010 unless Congress and the President extend the provisions of the Economic Growth and TAX Relief Reconciliation Act of 2001 ("EGTRRA").

More information on 457 plans