Section 457 deferred compensation plans, like 401(k)s, are defined contribution plans where the employee chooses from a menu of investment options predetermined by his employer.
Section 107(1) dictated the form of compensation paid ministers and discriminated against churches that could not afford to own housing or that otherwise preferred minister-owned housing for reasons of polity.
In 1978, Congress amended the Internal Revenue Code by adding section 401(k), whereby employees are not taxed on income they choose to receive as deferred compensation rather than direct compensation.