IRS May Finally Resolve FCU 457 Plan Questions: Print Preview
- IRS proposes regulations seeking clarification for FCUs.
- FCUs may be able to maintain executive deferred com plans, if regs are finalized.
- IRS seeking comment on proposal until Feb. 6, 2012.
More than seven years after working to settle questions about 457 plans at federal credit unions, the Internal Revenue Service recently announced that it plans to issue proposed regulations to clarify how they are used. Under Section 457 of the Internal Revenue Code, FCUs would be eligible to establish executive deferred compensation plans.
In addition, if a FCU maintains a qualified retirement plan, such as a 401(k) plan, it will be subject to the same code and ERISA rules that apply to state chartered credit unions and private sector employers, he added.
A governmental plan is defined in Section 414(d) generally to mean “a plan established and maintained for its employees by the government of the United States, by the government of any state, or political subdivision thereof, or by any agency or instrumentality of any of the foregoing.”