Q. Suppose you have a client that is unsure what plan to offer its employees.
A. Following is a look at the basics of what plans are offered by whom and what their features are.
| Plan | Offered by |
| 401(k) | All non-government employers (and some grandfathered government employers) |
| 401(a) or (m) | State and local governments and 501(c) tax-exempt organizations |
| 403(b) | Public education employers and 501(c)(3) organizations |
| 457(b) governmental | State and local governments |
| 457(b) Non-governmental | Any 501(c) tax-exempt organization |
| 457(f) | State and local governments and 501(c) tax-exempt organizations |
Plan Features
| Plan | Plan Document | Plan Loans | Distributions | Plan Terminations |
| 401(k) | Yes | Yes | Death, disability, at age 59½, termination | Yes |
| 401(a) or (m) | Yes | Yes | Death, disability, at age 59½, termination | Yes |
| 403(b) | Yes | Yes | Death, disability, at age 59½, termination | Yes |
| 457(b) governmental | Yes | Yes | Death, disability, at age 59½, termination | Yes |
| 457(b) Non-governmental | Yes | No | Death, disability, at age 59½, termination | Yes |
| 457(f) | Yes and with employment contract | No | Taxable when no substantial risk of forfeiture | No |
Recent Comments
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