The Top 10 Reasons Why Non-Qualified Deferred Compensation Plans Are Popular Many breathed a sigh of relief when the Tax Cuts and Jobs Act ultimately removed a provision that would have placed significant restrictions on nonqualified…
Section 162 Executive Bonus Plans
What is a 162 Executive Bonus Plan? A 162 Executive Bonus plan allows a business to provide life and/or disability income insurance to key executives using tax deductible dollars. Insurance policies are owned by the executives…
Funding & Benefit Security
Events during the past two decades have increased executives’ focus on the security of their non-qualified arrangements. This heightened awareness of benefit security comes at a time when companies, shareholders and the media are focused…
Shareholder Attempts to Add Clawback Provisions Fail
Shareholder Attempts to Add Clawback Provisions Fail In a recent trend, shareholders (primarily led by union pension funds) of large public companies have been pressuring compensation committees to add clawback provisions to executives’ contracts.
401(k) Refund – What Can Be Done?
401(k) Refund – What Can Be Done? At some point, highly compensated employees (HCEs) may find themselves in receipt of a refund check for what is determined to be “excess” 401(k) contributions. It is an unfavorable situation for both plan…
IRS Guidance: Application of Code Section 162(m) with Grandfathering Rules (Part 2)
This alert serves as part two of a two-part alert regarding changes to section 162(m) of the IRS tax code. Part two focuses on recommended steps to maintain and maximize grandfathered compensation, particularly in Non-Qualified…
IRS Guidance: Application of Code Section 162(m) with Grandfathering Rules (Part 1)
Recently, the IRS issued Notice 2018-68, providing guidance under Section 162(m) of the Internal Revenue Code, as amended by the 2017 Tax Cuts and Jobs Act (the “2017 Act”). Section 162(m) disallows the deduction of compensation paid by…
Bankruptcy and Non-Qualified Deferred Compensation Plans
The Internal Revenue Code requires that a Non-Qualified Deferred Compensation Plan (“NQDCP”) must be treated as an unsecured promise to pay future benefits such that participants can defer current income recognition.
Weighing the Options for Informally Funding Non-Qualified Benefits
Informally funding deferred compensation programs can offer advantages to both participants and companies. The practice can help support a company’s promise to pay future benefits to plan participants while minimizing income statement volatility.
Deferred Compensation Plan Tax Benefit Comparison
For most employees, 401(k) plans are an effective solution to retirement needs. However, key employees and executives require more. At higher income levels, tax-advantaged savings opportunities are limited by the government.