Non-Qualified Deferred Compensation
Non-qualified deferred compensation plans are often used for executives to accumulate meaningful retirement benefits due to restrictive limits under traditional tax-qualified profit-sharing and pension plans. These types of plans often raise important questions about the continued viability of the employer to pay plan benefits and the risk that payments might not be made upon a change in control. Rules under ERISA also restrict who may be covered under a non-qualified deferred compensation plan.
We regularly represent clients of all sizes with non-qualified deferred compensation designs, including make whole plans that replace benefits not received due to tax-qualified plan limits, elective plans and supplemental executive retirement plans. Our approach focuses on practical and legal ways to provide flexible access to non-qualified deferred compensation prior to retirement without running afoul of constructive receipt rules and expanded coverage for employees.
Our practice is also sensitive to the unique needs of our tax-exempt clients. It is much more difficult compensating executives at tax-exempt organizations due to the Section 457 limits under federal tax rules. We work with clients to develop and evaluate benefit programs in light of these limits, including new Section 457(b) eligible plans and split-dollar life insurance, that is sensitive to the special reporting requirements for tax-exempt organizations.
We also remain vigilant for changes to the tax rules for non-qualified deferred compensation. Our services include lobbying on tax legislation, including recent proposals to restrict when executive may access deferred compensation funds and how a company may fund payment for future plan benefits.
Contacts
- John P. Hendrickson PC
+1 312 984 7645
Send E-mail - Andrew C. Liazos
+1 617 535 4038
Send E-mail - Stephen Pavlick PC
+1 202 756 8312
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