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|Subject: Re: 457 exposure to creditors||Date: 9/3/1998 5:39 PM|
|Author: TMFPixy||Number: 5322 of 74775|
Dennis, you wrote:
Okay, I broke down and used the phone. I called the Public Employees Benefits Services Corporation (PEBSCo) which is the plan administrator for my wife's 457 deferred compensation program. According to the very helpful person at the other end of the line, legislation in the form of the Small Business Job Protection Act of 1996 signed by Bill Clinton *does* protect 457 accounts from creditors (both personal creditors and those to whom your employer is beholden). The Act requires plan administrators to set up custodial accounts with banks to enable this protection (e.g., Bank One of Columbus OH for PEBSCo accounts). All "units" (i.e., counties, municipalities, etc.) are supposed to be in compliance by Jan 1, 1999. I don't know if this satisfies your request for legal citation, but I did fire off an email to PEBSCo before talking to them on the phone so more info may be forthcoming. Hope this helps.
It does and did indeed. Finally, I can nail this one down. And your info is correct as it pertains to governmental 457 plans. Those of tax-exempt organizations with 457 plans, though, will still see their accounts subject to the claims of their employer's creditors. As for you, it looks like your spouse is safe. First, the plan must be funded and that money must be held in trust. A giant leap forward for city, county, municipal and state employees with such plans.
Thanks for the post.
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