Retirement — Gov & Nonprofit
About this plan
A 457 FICA Alternative plan lets governmental employers replace Social Security (OASDI) contributions for part-time, seasonal, and temporary (PST) employees under IRC §3121(b)(7)(F). It is not a voluntary elective-deferral plan — participation and contribution rates are mandatory and set by the employer. The IRS safe harbor requires a combined employer-plus-employee contribution of at least 7.5% of compensation. Funds are tax-deferred and available at separation from service or upon receiving a qualifying pension from the same employer.
What's Included
For Employers
If you employ substitute teachers, part-time staff, or seasonal workers, a 457 FICA Alternative lets you meet federal requirements without enrolling those employees in Social Security. Unlike a standard 457(b), contribution rates are mandatory and employer-set — the IRS safe harbor requires at least 7.5% combined. NBS handles the plan document, eligibility tracking, and ongoing administration.
For Participants
Instead of paying into Social Security, your employer contributes to a 457 FICA Alternative account in your name. This is not an elective 457(b) — contribution rates are set by the plan, not elected by you. Funds grow tax-deferred and are available when you leave employment or meet other qualifying conditions.
NBS administers more than 457 FICA Alternative Plans
Many employers use NBS across multiple benefit types — consolidating administration simplifies vendor management and gives your employees a consistent experience. You may also be interested in these related plans.
