Which organizations are eligible employers for 457 plans?

The eligibility of employers for 457 plans specifically includes state and local governmental employers as well as non-governmental tax-exempt organizations. This means that entities such as municipalities, public universities, and certain non-profit organizations can establish 457 plans for their employees.

This distinction is important because 457 plans, which are deferred compensation plans, were designed to provide a means for employees of these eligible organizations to save for retirement on a tax-deferred basis. They are not available to private corporations, nor are they universally available to all employers, thereby making option B the accurate choice.

Understanding the types of organizations that can offer 457 plans is crucial for effective planning and participation in such retirement savings vehicles. This knowledge ensures that eligible employees can take advantage of the benefits these plans offer, including higher contribution limits under certain circumstances compared to other retirement plans.