How are folks handling the "special" contribution limit rule on 457 plans?
The management seems tricky and would conflict with our current BSI settings for other catch ups.
One of the features that is allowed by the IRS and by our Plan (see attached) but which we haven’t really done is a unique catch up provision. It only applies to participants who are within 3 years of turning 65. If they did not contribute the full amount allowable in those three years, they can contribute either twice the annual limit or the basic annual limit plus the amount of the basic limit not used in prior years.
The most special aspect of 457 plans
There is one feature that 457 plans offer that you won't find with 401(k) or 403(b) plans. There is a special provision that offers catch-up contributions that are enhanced compared to other retirement plans. For up to three years prior to reaching normal retirement age as specified in the plan, 457 plans can allow participants to contribute up to twice the annual limit. That means that if a plan specifies age 65 as the normal retirement age, then 62-, 63-, or 64-year-olds could contribute up to $36,000 in 2017 -- twice the standard $18,000 contribution.
https://www.fool.com/retirement/2016/12/19/457-plan-contribution-limits-in-2017.aspx
