Deadline for Amending Governmental Section 457 Plans Approaching
(Posted on October 19, 1998 by )


Internal Revenue Service ("IRS") officials have recently expressed concern that many state and local governmental section 457 plans will become "ineligible plans" as defined in Internal Revenue Code ("Code") section 457(f) as of January 1, 1999. The result would be to cause covered employees to be liable for income taxes on vested amounts deferred under the plans, and to cause state and local governmental employers which sponsored such plans to be liable for the amount of income tax which should have been withheld on deferred amounts. Read more

Deferred Retirement Option Plans (“DROP” Plans)
(Posted on October 13, 1998 by )


In recent years, many retirement plans, particularly those operated by state and local governments, have adopted some form of deferred retirement option, or "DROP," plans. This article discusses what a DROP plan does, what the attraction of a DROP plan is from the perspective of both the employer and the plan member, and the legal and actuarial issues raised by DROP plans. Read more

Purchased Service Credit
(Posted on January 16, 1998 by )


  1. Budget Bill Changes to Section 415 Limits on Purchased Service Credit. The 1997 Budget Bill, Public Law 105-34, contained provisions regarding the section 415 implications of purchased service credit, as follows: Read more

Fields letter
(Posted on August 20, 1991 by )


Mr. August D. Fields
Godwin, Carlton & Maxwell
NCNB Plaza, Suite 3400
901 Main Street
Dallas, TX 75202-3714

Aug. 20, 1991

Dear Mr. Fields:

This letter is in response to your request for general information, dated June 15, 1991, regarding the application of the limitations of section 415 under the Internal Revenue Code to state and local governmental plans, as defined in section 414(d) of the Code. Read more