Deferred compensation is past or future income that is paid at a later date, usually at the end of an employee’s service. A deferred compensation plan, or 457 plan, is an arrangement whereby an employee or owner defers some portion of their current income until a specified future date. Wages earned in one period are actually paid at a later date.
457 plans can be established for certain classes of individuals or key employees. This allows employers to provide benefits for a specific group of employees.
These products are for certain governmental and non-profit employers.