Whats the difference between Section 457 and a Rabbi Trust?

Posted in Rabbi Trust Advice over 4 years ago, 2 replies

I'm trying to wrap my head around the difference between a Section 457 and a Rabbi trust and its honestly making my head hurt. :) Are both deferred comp plans?

Which one is better for which situation? MUch thanks!

Tim
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submitted by Tim in California
Tim,
A Section 457 plan is a type of deferred compensation plan used by government and nonprofit entity to recruit, retain and reward highly compensated employees (HCEs) within the organization. When an organization decides to set aside funds to pay the HCEs, they traditionally set up a type of grantor trust, called a rabbi trust, which holds the funds that are specifically earmarked for the deferred compensation plan, which in your case is a 457 plan.

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submitted by Donald in USA @ June 23, 2008 - 03:19 PM
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Would you please tell me if a HCE can make contributions to a Rabbi Trust (457f)? And what the limits are.Thanks.
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submitted by Susan Daileader in Braintree, MA @ May 08, 2009 - 01:05 PM

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