What's A 457 Retirement Plan? 
Section 457 plans are nonqualified deferred compensation plans available only to state and local government employers , and nongovernment organizations exempt from tax under IRC Section 501 . Generally 457 plans are utilized for two reasons - 1 . As deferred compensation plans that allow participants to reduce their taxable salary in a manner similar to that of 401 -LRB- k -RRB- plans . 401 -LRB- k -RRB- plans generally are not available to state and local government organizations . 2 . As supplemental benefit plans that provide executives with supplemental retirement income . 