you are a good man dude
"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message
news:m42Eb.57789$cQ.35107[at]okepread05...
- quote -

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message news:<m42Eb.57789$cQ.35107[at]okepread05> ...
- quote -


Let me re-phrase this: while the employer may only offer the 457b to
certain highly paid employees, is there any rule or reason why they
would not offer it to other employees as well? In other words, is a
457b expensive to administer or are there any sorts of income or legal
requirements for participation per the IRS?

Thanks,
Mike

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0312170528.6b870138[at]posting.google.com...
- quote -

I'll repeat my answer -- ABSOLUTELY!

Look at it this way - the 403(b) plan limits are REVERSE discrimination
against the highly compensated, because they cannot save enough for
retirement.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Wed, 17 Dec 2003 07:26:05 CST, msgrinnell[at]charter.net (Michael
Grinnell) wrote:


- quote -

Private entity sponsoring private deferred compensation plan can
discriminate in terms of participation.

-HW "Skip" Weldon
Columbia, SC

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message news:<6dJDb.57009$cQ.20874[at]okepread05> ...
- quote -


Do I understand that legally my employer may only offer the 457b to
certain high-end employees? I understand (because most of my fellow
employees save little, if any in the 403b anyway) that going over the
contribution limit is not an issue with most employees so my employer
would not want to pay for any administrative expenses for a plan that
hardly anyone would use. Not that my holding an MBA affects my saving
habits that much (I might be a spendthrift regardless -- some
knowledge of finance perhaps helps make slightly wiser investment
decisions, I suppose), but I am able to save about 25% of my gross
which exceeds even now the $11000 limit for my 403b. As I stated
above, I have a pretty diverse portfolio of mutual funds (everything
from Blue Chip to aggressive growth to loan-participation funds and
intermediate bonds with $$ growing to cover the cost of a new car and
re-shingling my house when needed). At present, I don't go over much
so that issue is more principle than anything.

Thanks,
Mike

"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote in message news:<3u2stvgoo9kbgekkj71fsh47ra0pn6n7la[at]4ax.com> ...
- quote -

This is a private non-profit hospital. The documentation provided by
HR states it is a 457b plan.

Mike

"Brent D. Gardner, ChFC" <bgardner20[at]cox.net> wrote in message news:<U7uDb.56942$cQ.38317[at]okepread05> ...
- quote -

Upon re-reading the documentation HR published, it states that total
employer and employee contributions to the 403b and 457b together
cannot exceed $40,000. I am not sure if they are therefore implying
that my employer matches 457b contributions or just that legally this
is the limit. My employer does not match anything whatsoever for my
403b contributions. Since I am a disciplined saver and have actually
done okay with a diverse portfolio over the past several years despite
a weak market this is disappointing. The pension plan was just
revamped and now there will be no cost of living adjustments for post
January 1 2004 pension amounts earned.


Mike

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:af2utvggr56jjjnqnd7kspgo208jgjc2r6[at]4ax.com...
- quote -

You're right. The employer, in this case, a government entity, MAY allow
everyone to participate in certain 457 plans. Many have more than one
plan -- one for everybody, funded with employee participant dollars, and
another one for the top hat group that is funded with tax dollars. My home
town's city manager just retired in disgrace for some malfeasance (after
firing two others, who needed to go), and the deferred comp plan for these
guys has become a political hot potato, because its benefits are so rich.
Rank and file people don't get it, but these plans are necessary to attract,
reward and retain management talent. Of course, when the talent is
stealing - as was in this case - the reward seems improper. At least none of
these thieves will get any extra severance, and the only people who are
going to welcome them into their homes are the same den of thieves that used
them to bilk the city out of millions.

Personally, I think that deferred comp should be offered to rank and file
people, in particular those who are older, or who just want to save more.
Uncle Sam is who makes it tough. ERISA compliance makes many nonqualified
plans more of a pain in the butt than they are worth for small employers,
which is why we limit access. It doesn't seem fair to those who aren't
allowed to participate, but it is the best decision, given the laws
involved. We're getting some changes soon, some of which are okay, some of
which are going to suck, but that's what happens when politicians get
involved and start redistributing wealth to obtain votes.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Tue, 16 Dec 2003 04:03:43 CST, "Brent D. Gardner, ChFC"
<bgardner20[at]cox.net> wrote:


- quote -

It depends on the type 457. If a Public Employee 457 (like many
States offer), and if used in conjunction with either a 403b or 401k,
and if they are eligible for and use the maximum catch-up provisions
(lots of "ifs"), then they can get close to $40,000 in total pre-tax
contributions. Plus, the public plans are open to all employees (at
least the ones I've bumped into are.)

But you are correct if this is a private deferred plan.

This is why I asked him about the plan. It wasn't clear to me which
type of 457 he was discussing or whether his employer is public or
private. Hopefully he'll get back to us.


-HW "Skip" Weldon
Columbia, SC

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0312151013.23d4911c[at]posting.google.com...
- quote -

Who told you that someone can defer $40,000 into a 457(b)? Whoever it was,
they are misinformed, so ignore them. As far as legal - ABSOLUTELY!

457 plans are not qualified plans, but deferred compensation plans for
non-profit businesses. The business MAY discrimininate within their ERISA
top-hat group. If you're not in the top 7-10%, by income (subject to several
misc requirements), the odds are you're not going to be offered the
opportunity to participate. Some plans allow as many as the top 15%, even
the top 20% to participate, but they often flirt with being "qualified" and
subject to the huge burden of ERISA, plus some nasty tax consequences.

457(b) is limited to $12,000 of deferrals, and there is no substantial risk
of forfeiture required. Deferrals above this are subject to 457(f), with no
limits on deferrals, as long as a substantial risk of forfeiture exists.

At the goals you mention, you can achieve most of those saving levels with a
403(b) and IRA/Roth IRA.

An aside: Discrimination is a word with nasty connotations. That said,
discrimination is part of life. Deferred compensation plans, such as 457
plans, or any other nonqualified plan, are designed to rectify REVERSE
discrimination against the highly compensated, or TOP HAT group. For
example, compare the projected retirement replacement ratios of the
President of a company earning $200,000 to someone else earning $30,000
(both age 45, retiring at 65, defering 10% of income into 401(k) [at] 8% ROR,
and SS estimated payments).

At 65, the regular employee's retirement income will replace 82.9% of their
pre-retirement income.

The President only gets 43.8%.

That is REVERSE discrimination, which you can thank Congress, via ERISA,
for. Nonqualified plans just fix that debacle so that people at the top can
save for their retirement, too.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Mon, 15 Dec 2003 12:58:45 CST, msgrinnell[at]charter.net (Michael
Grinnell) wrote:


- quote -

Before getting into this, are you talking about a Public Employee
Deferred Compensation plan, or something else? (Sometimes I see
confusion on the numbers that refer to a plan.)

-HW "Skip" Weldon
Columbia, SC

List,

I recently discovered that my employer is offering participation in a
457b to some employees, but not all. I inquired and was told that
"my" plan was the 403b and that basically the 457 was for (in so many
words) those people who get to park next to the building from day one
of their employment. It would be very nice to be able to put up to
$40k away sheltered (I can't do 40, but can do $15 -18K) Is it legal
to provide participation in a 457b in addition to a 403b to some but
not all employees?

Thanks,
Mike