With the industry's focus on 401(k)s, DB plans and 403(b)s, 457 plans garner much less attention. Yet, according to a recent report by the National Association of Government Defined Contribution Administrators (NAGDCA), to conclude that they are insubstantial is very much mistaken.
In its “Public Sector Defined Contribution Plan Survey Report,” the NAGDCA studied 129 DC plans governments offer their employees. Of those, 61% offer 457 plans; in fact, 457s were the most frequently offered of any kind of plan among those the NAGDCA studied.
The collective assets of those 457s grew steadily from 2011 to 2014, and their plan assets amounted to more than $132.9 billion as of Dec. 31, 2014. The largest plans were those of New York City, with assets of $13.2 billion; Ohio, with $11 billion; the California Savings Plus Program, at $9 billion; and Los Angeles at $8 billion.
The 88 457 plans together boasted 1.7 million participants and had a 40% participation rate.
The 457s compared favorably with their other DC counterparts. The average account balance of those 457 plans was $60,100, higher than any other kind of DC plan the governments offered except for 403(b)s. No other kind of plan had as strong an employer match rate: just under 80% of the governments offered a match of employee contributions to their 457s. And the 457s made available more core funds in which participants could direct that their funds be invested than any other kind of DC plan the governments offered their employees.
