Who owns the assets in a Section 457 plan?
Section 457 plans are unique: They are long-term, non-qualified deferred-compensation programs that are available only to state and local government employees and tax-exempt organizations. They re also subject to some unique provisions and risks. All the assets in a 457 plan are owned by the entity that offers the plan, but the assets of tax-exempt organizations are subject to seizure by creditors. Assets of Section 457 plans established by state and local governments have to be held in trust, which protects them from creditors and money-hungry bureaucrats. Each worker has a segregated account and can direct his or her account balance into any approved investment option.
