IRS reviewing who can maintain 457(b) plans

Dec. 16, 2011 – NAFCU is seeking members’ input to provisions of an IRS advance notice of proposed rulemaking on how it will determine whether an employee benefit plan meets the definition of a “governmental plan.”

The ANPR, with comments due to the IRS Feb. 6, is important to federal credit unions because it could affect the institutions’ ability to maintain nonqualified deferred compensation plans under section 457(b) of the federal tax code. The ANPR contemplates treating FCUs as “eligible employers” on the basis of their status as “non-governmental tax-exempt organizations.”

NAFCU is seeking members’ input to its official comment letter; that input is due Jan. 16. For more, see Regulatory Alert 11-EA-34.