 If funds are set aside or provided in a separate account for the employee or in the employee's name then that type of 457 plan is not a tax-deferred plan and becomes a nongovernmental 457(b) funded pretax plan.Employee Retirement Income Security Act (ERISA) legislation has said that nongovernmental plans must be limited to some group of more highly compensated employees.The level of compensation required is not specified by ERISA, but it must be according to some ascertainable standard that the employer sets.