This week the IRS published draft proposed rules defining governments and government related entities for qualified plan purposes.  76 FR 69172. Resolving a six-year controversy, the draft rules also state that for purposes of non-qualified deferred compensation plans, federal credit unions are tax-exempt non-government entities, not federal instrumentalities. The result is that federal credit unions can sponsor 457(b) plans and 457(f) plans as any other tax-exempt organization. If the final regulations look like the proposed rules, few, if any, changes to current plans will be required. 457(b) plans designed to meet the 409A requirements could remove the 409A restrictions (such as annual deferral elections and five-year postponements for changing the time and form of benefit payments). Even now, new plans can be installed with greater confidence in the 457(b)/457(f) approach.