Deferred Comp - 457(b) and 457(f)
The Principal® Deferred Comp - 457(b) plan and the Principal® Deferred Comp 457(f) plan are offered exclusively for non-governmental tax-exempt organizations. These organizations may offer nonqualified deferred compensation plans for a select group of highly compensated or key management employees. These retirement plan benefits are available to these employees outside the restrictive eligibility, vesting and contribution limitations of ERISA.
The 457(b) and 457(f) plans can work independently or in conjunction with each other.
- 457(b) allows both participant and plan sponsor contributions in excess of retirement plan limitations up to annual limits.
- 457(f) allows the only the organization to make discretionary contributions in addition to the 457(b) limitations. Participant contributions are not allowed in this plan.
View Employer Summary (BB9486) to review the benefits and considerations of these plans for plan sponsors and participants.
Target organizations that display most of the following attributes:
- Business entity (non-governmental tax-exempt organizations)
- Strong financial situation (profitable, good cash flow)
- Highly compensated employees with retirement income gap and/or income deferral needs
- Willingness to provide a solution for key employees
For Plan Participants
- Participants have the opportunity to defer compensation in excess of retirement plan limits on a pre-tax basis (457(b) only).
- The 457(f) plan allows plan sponsor contributions in addition to the 457(b) limits.
- Ability to design an individualized investment strategy.
For Plan Sponsors
- Flexible plan designs to help meet organizational needs
- Assets accumulated to finance the plan remain an asset on the organization’s balance sheet.
- Flexible plan design and multiple financial options available.
- Plan is simple and easy to administer, requires no discrimination testing, minimum participation or Form 5500 filing, if set up properly.
Deferred compensation plans are unfunded contractual obligations to pay benefits to a plan participant in the future. The employer can choose to informally finance the future obligation or leave the obligation unfinanced. The best financing method is dependent on the employer’s financial characteristics and the degree of risk that is acceptable to plan participants and the employer.
Financing and Investment Capabilities Brochure (BB9784)
Demonstrates the ability of Principal to help clients simplify the financing and investment aspects of their deferred compensation plans.
View (PDF) • Order
For those employers choosing to informally finance the plan, most offer a range of investment options and allow their plan participants to choose reference investments among multiple fund families and money managers. This allows plan participants to choose reference investments that fit their specific objectives and risk tolerances.
Investor Profile Quiz (BB9671)
Give this to plan participants to help them determine the reference investments right for their risk tolerance. Order a printed version, or use the "fillable form" PDF by selecting View.
Principal LifeTime Portfolios for NQDC Plans Brochure (LV283)
Show plan participants how Principal LifeTime Portfolios can take care of asset allocation and diversification decisions.
Key sales ideas and success stories below. View all key employee retention and retirement success stories. See other sales approach tools.
Retirement Gap Chart Detail Flyer (BB9605)
Shows the gap between retirement income replacement goals and the benefits received from Social Security and qualified plans. Then discusses how a nonqualified supplemental retirement plan could help fill that gap. Includes annual qualified plan and IRA limits.
View (PDF) • Order (PDF)
Primary Uses of Nonqualified Deferred Compensation Brochure & Presentation (BB9720 & BB11557)
Use the brochure and presentation to demonstrate to prospective employers six primary examples of how deferred compensation plans can benefit them.
View (PDF) • Order (PDF) • View Presentation (PPT)
Before the Sale
Deferred Compensation Capabilities Brochure (BB9406)
Present the comprehensive plan-level expertise and administrative plan services that Principal® provides for its deferred compensation plan employer clients.
View (PDF) • Order
Combo 457(b) & (f) Business Opener (Customizable) (BB9471) & Opener Presentation (BB11425)
This marketing piece and presentation is designed to introduce both the Deferred Comp - 457(b) and 457(f) plans. To create a customized electronic file, select “Order” below. To show qualified plan limits, use BB10362.
View (PDF) • Order • View Presentation (PPT)
Additional key employee retention and retirement approach tools.
During the Sale
Retirement and Investor Services (RIS) Distribution is responsible for all 457 plan sales and pricing. Customized proposals are available upon request. Please contact the RIS Advisor Support Team at 800-952-3343, option 2 for more information.
Engagement Agreement (BB10291)
Once the client is ready to use our in-depth plan design consulting, complete this agreement and return with engagement fee.
After the Sale
NQDC Summary of Services (NQ23)
Outlines core and optional administrative services available.
457(b) Sample Participant Statement (NQ9)
Sample report for the participant.
NQDC Implementation & Enrollment
Access materials for use in the plan implementation process, including business submission guidelines, participant materials and sample agreements.
Go to NQDC New Business Enrollment
Key materials listed below.
Advanced Markets Information
Technical material for applied knowledge on a specific topic.
View Advanced Markets Information
457(b) Discussion Tracks (BB10227TE)
Questions and answers to guide you through a discussion with a client about a 457(b) plan.
Countering Common Objections Flyer (BB10547)
Use this piece to overcome clients' hesitations about nonqualified plans and help them make an informal decision
- Contact Us: RIS Producer Support Team at 800-952-3343, option 2
- Request for Proposal: Customized proposals available upon request. Please contact the RIS Producer Support Team at 800-952-3343, option 2 for more information.
When we use the term “money manager,” we may be referring to an investment advisor or sub-advisor of an underlying mutual fund.
Before investing in mutual funds or variable life insurance, investors should carefully consider the investment objectives, risks, charges and expenses of the funds or the policy and the underlying investment options or online at www.principal.com. This and other information is contained in the free prospectus and, if available, the summary prospectus that can be obtained from your local representative or online at www.principal.com. Please read the prospectus and, if available, the summary prospectus carefully before investing.