Can an Indian Tribe set up a 457(b) plan as a Governmental organization since PPA

The available information on this question is discussed in chapters 2 and 14 in 457 Answer Book (WoltersKluwer).

I looked at that ,and it is basically unclear. I was wondering if anyone has seen anything else related to them being eligible or not for a 457(b)

Carol Calhoun's explanantion in chapter 14 about whether a Native American Indian tribe might or might not be a State government employer within IRC 457(e)(1)(A) describes some uncertainties because the law that Congress made is ambiguous or uncertain. Carol is one of a very small handful of governmental-plans experts; so if there were a published ruling, she'd likely know about it and write about it.

Perhaps your client is a candidate for seeking an IRS ruling?

Indian tribes will be eligible to establish a 457b plan only if it meets the requirements for a tax exempt organization or are a state or political subdivison or agency or instrumentality of a state . Indian tribes are regarded as foreign nations under federal law under the supervision and care of the federal government and are exempt from state laws.

Thanks FGC -I agree with you about Carol's expertise. I was hoping something may have come up recently for which she might respond.

The IRS cannot issue a ruling to extend a statute beyond its legislative boundaries to designate an indian tribe as a state instrumentality under 457. Retirement programs can be extended to otherwise ineligible entities by legislation. A few years ago Congress legislated that the Armed Forces Medical Institute was eligible to sponsor a 403b annuity plan even though its is not a 501c3 or public school. There is also a legislated exception which grandfathered indian tribes which had established 403b plans for tribal schools prior to 1995. See Small Business Jobs Protection Act of 1996 Section 1450(b). The IRS acknowledged a few years ago that it had mistakenly issued rulings and instructions that allowed federal credit unions to establish 457b plans for many years even though they were ineligible because they are federal instrumentalities. The IRS was supposed to come up with a fix but I dont know what was done.