Code Section 457(f) Conundrum: How to Handle Past Year Mistakes (from Vesting)

Summary

For those in the private sector, as well as those accustomed to Code Section 409A, it seems natural to allow "deferred compensation" to be vested before pay-out occurs. That is the essence of salary reduction contributions, which generally must be 100% vested when deferred. Perhaps that is why tax-exempt organizations seem to stumble at times by establishing non-qualified plans that do not defer compensation.