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KenJ

457 Question

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My school district has indicated that they will try to get all non-teacher and temporary teachers to leave the Social Security system and instead enroll them in a 457 plan - already established by the state of Massachusetts. This would save them approx. $75,000. (Mass. teachers are not part of Social Security)

 

My questions is, if the district becomes part of the state's 457 plan for these employees, would the full time teachers (like me) then become eligible to participate??? I know 403b regs pretty well, but have no experience with 457 plans.

 

Our new 403b options are horrible, and the state 457 plan has seemingly low fees and great options - including setting up a brokerage account with TD Ameritrade.

 

 

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There is really nothing that I am aware of that would limit teachers from having access to a 457(b) plan. In rural school districts where I live, the County Office of Education offers 403(b) and 457(b) plans. The 457(b) plan they offer is with CalPERS.

 

If the Mass State Plan is a good one, push HR/Admin. to offer it to everyone.

 

Gerry L.

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My school district has indicated that they will try to get all non-teacher and temporary teachers to leave the Social Security system and instead enroll them in a 457 plan - already established by the state of Massachusetts. This would save them approx. $75,000. (Mass. teachers are not part of Social Security)

 

My questions is, if the district becomes part of the state's 457 plan for these employees, would the full time teachers (like me) then become eligible to participate??? I know 403b regs pretty well, but have no experience with 457 plans.

 

Our new 403b options are horrible, and the state 457 plan has seemingly low fees and great options - including setting up a brokerage account with TD Ameritrade.

 

 

Are you sure of this? According to a summary of the SS law published by William M. Mercer, once a government elects to participate in SS it cannot to withdraw from SS at a later date so the 6.2% tax on both the employer and employee will continue to be withheld. It would be possible for MA teachers to be excluded from SS because they are state employees but non teaching employees and temporary teachers to be employees of the SD who participate in the SS system. Also all State and local government employees must pay the 1.45% medicare tax even if there is no SS coverage.

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