As a leading provider of retirement plan services, Legend can assist your organization
with the design, implementation and maintenance of a §457(b) Governmental plan.
Eligible Employers
Public educational institutions; state, county and municipal governmental agencies
Eligible Employees
Employees
Independent Contractors
Elective Deferral Limit
The lesser of 100% of the participant’s compensation or $17,000 in 2012
Over Age 50 Catch-Up
$5,500 in 2012 (may not be offered under all employer plans)
Other Catch-Up Available
The lesser of twice the normal limit or the total of amounts not deferred in prior plan years
(may not be used in conjunction with the Over Age 50 Catch-up)
Taxation
Distributions are taxed as ordinary income when paid out to the participant
Loans1
Participants may take a loan in an amount that is one half of the account value up to $50,000
Loans are an optional plan feature and must be qualified on an employer plan basis
Unforeseeable Emergencies
§457 plans have stricter guidelines than those established under a §401(k) plan
In order to qualify, a sudden and unexpected illness or accident to the employee or his/her dependent, or a loss of property
due to a casualty or events beyond the employee's control must occur (optional plan feature)
In-Service Distributions
None
Exchanges
Participants may exchange accounts
from one approved §457(b) vendor to another approved vendor
Transfers to & from Plan
Participants may transfer accounts from one employer’s §457(b) governmental plan to a new employer’s §457(b) governmental plan
Rollovers into Plan
Participants may rollover distributions from other
eligible retirement accounts into the employer’s §457(b) plan (optional plan feature)
Premature Penalty
None at any age
Required Minimum Distributions
A participant must begin taking distributions at the later of the attainment of age 70½ or retirement. The first minimum distribution must be taken by April 1st of the year following the year containing this triggering event.