Section 162 Executive Bonus Plan

[coldsteel]

Our hospital is discontinuing our 457 pension plan and going to a Section 162 Executive Bonus plan for certain physicians and well compensated administrators. I would prefer to say in the 457 but that plan may not be available to me going forward and I am not one of the chosen few who will be offered the 162 plan. Does anyone have any experience with the 162 plan? From my internet research, it looks like an insurance product/annuity funded with post-tax money contributed by the employee. The 457 is funded by employer (hospital) money, and therefore owned by the employer but available and taxable upon the employee's retirement. Why would the hospital choose to discontinue the 457 and go to the 162?

[jz]

correction: ..........the 457 is funded by employee pretax dollars, but maintained as an asset by the hospital until the employee requests distribution or retires.

Without any familiarity with 162 money,  my hunch is that the decision was made by administrators because it advantages their niche.