Statement of Mark D. Wincek Kilpatrick Stockton LLP at the Hearing on the Section 409A Proposed Regulations January 25, 2006
|
|
- Willis Oscar Cole
- 5 years ago
- Views:
Transcription
1 Suite th St., NW Washington DC t f MWincek@KilpatrickStockton.com Statement of Mark D. Wincek Kilpatrick Stockton LLP at the Hearing on the Section 409A Proposed Regulations January 25, 2006 I must begin by expressing my profound respect for the caliber of work that went into producing the proposed regulations. The regulations reflect a pattern of working to resolve problems (rather than to create them) and of not picking unnecessary fights. To all who were involved my compliments on the quality of the work, and my sympathy for the quantity. At the same time, given the enormous range of compensation structures that are affected by Section 409A, and the complexity that results, it will not be a surprise that I come before you today with suggestions. I appear on behalf of my law firm, Kilpatrick Stockton LLP, and the many large and many emerging companies that we represent with respect to Section 409A issues. I will review several broader suggestions, and mention a few of the more detailed items that are listed and briefly summarized at the end of my statement. Good Faith Compliance The good faith compliance period for Section 409A currently is scheduled to terminate at the end of this year. Informal comments by government personnel have suggested that a reasonable, good faith position taken in 2005 and 2006 will immediately cease being protected on January 1, This suggests a regime where basic interpretations related to a plan sponsor s 409A compliance strategy would require quite rapid revision once final regulations are issued later this year. For example, it appears there will be a period of no more than six months to address problems that arise from finalizing the current proposed regulations. Further, it appears there will be even a shorter period to address problems that arise from the additional 409A regulations that are expected to be proposed later this year (and that are unlikely to be finalized until relatively late in the year). The need to make changes during these periods will be additionally complicated by the fact that the changes may relate to arrangements with terminated employees that can only be changed by bilateral agreement, by the fact that board action may be necessary, and by the fact that the right to cancel deferrals under Q&A-20(a) of Notice is no longer available. The challenges will be compounded by an 1
2 affected employer s need to complete its documentary compliance for all arrangements at the same time, including those less fundamentally impacted by the final regulations. It seems clear that if good faith compliance ends abruptly on January 1, 2007, many employers will not have an adequate opportunity to restructure affected arrangements in time. With the loss of Q&A-20(a) relief, many may not have sufficient tools to do so quickly. If the release schedule for final regulations is delayed, as happened in the case of the proposed regulations, the difficulty will be increased. It is likely that the Service and Treasury will not even hear of some problems until the final regulations are released and digested. This is a case where the Service and Treasury should take the long view. Given the breadth and complexity of 409A, the Service and Treasury should permit a reasonable transition out of good faith compliance, i.e., a transition that would extend beyond January 1, A 409A Corrections Program Is Needed A program for sponsors of nonqualified deferral plans to correct 409A compliance errors is needed. The Service currently may not have the resources for a supervised corrections program. That is a challenge, because it would be natural for the Service to want to proceed as it did under EPCRS, i.e., to begin with an IRS supervised program in order to obtain experience and to develop a level of comfort on what could be self corrected. However, given the pressures on plan sponsors in connection with 409A, we think the Service should move forward with a corrections program without regard to whether it has sufficient resources for a program of supervised corrections. If resources are a constraint, the Service should push forward with a self-correction program. Certainly there are a range of basic errors for which self-correction guidance could be provided, errors such as -- a payroll system hiccup results in salary deferral amounts not being deducted for a month, or a distribution check is cut and sent to the wrong participant. There may be concern that implementing a selfcorrection program without the benefit of prior experience under a supervised program may result in standards for self correction that are too generous. We do not think that should be a barrier. First, the Service s extensive experience under EPCRS will help it in crafting a program under 409A. For example, the time limit on self-correcting significant errors could be carried over from EPCRS. Second, it is natural and appropriate to gradually ramp up compliance expectations and enforcement on sweeping new statutory requirements. In connection with the enactment of ERISA, the Service did exactly that. If the Service offers a self-correction program and then determines that its initial guidelines have been a bit too generous, they can be tightened prospectively. That would be completely consistent with gradually ramping up compliance expectations related to Section 409A. 2
3 Merely announcing and committing to a corrections program would be an important step forward. Therefore, as part of publishing final regulations, we suggest that the Service should announce its intention to establish a 409A self-corrections program and to request comments on the kinds of errors that should be included in the initial program, as well as the appropriate corrections for these errors. We believe there are a set of errors that are likely to occur more frequently and that have reasonable corrections. Therefore, even a somewhat limited program of self-correction could make a major difference. Information Reporting Q&A-29 of Notice provided guidance on reporting the total amount of each service provider s deferrals for a year. For 2005, Notice has cancelled the obligation to report these amounts. With regard to reporting, much of the discussion has focused on the difficulty of other reporting, i.e., reporting amounts that become taxable under 409A. However, the need to report taxable amounts is clear. It is much less clear that the Service will be able to make real use of reports regarding the amount deferred each year. Presumably for this information to be useful, the Service would need a system that could store the information for years into the future and then retrieve it easily by service provider and recipient. It seems unlikely that any such system exists or that it will exist any time soon. At the same time, providing these reports to the Service will be burdensome for many employers. The total cost of providing these reports across the entire economy will be substantial. These burdens and costs should not be imposed unless there is an adequate justification for them. Therefore, we suggest that the Service and Treasury announce in the final regulations that the requirement to report on the amount of each year s deferrals is suspended indefinitely. We believe past practice indicates that this is within the power of the Service and the Treasury, even though there is a statutory requirement for this reporting (Sections 6041(g)(1) and 6051(a)(13)). For example, in the welfare benefit area, the Service suspended reporting required by Section 6039D in Notices and There the Service applied the principle that it should not require the reporting of information that it cannot currently use. We believe that represents a sound policy to guide the administration of reporting requirements, and on this basis the Service should not hesitate to suspend indefinitely the requirement to report the amount of each year s deferrals. Changing Forms of Payment The proposed regulations contain valuable extensions of the transition relief set forth in Notice For example, Q&A-19(c) makes it possible to give participants the right to make new payment elections with respect to compensation covered by 409A, 3
4 and the proposed regulations extend this transition relief until December 31, Changes in payment elections under Q&A-19(c) require the involvement of participants. The extent to which employers may unilaterally change available payment forms is less clear than it should be. There is considerable interest in this in connection with nonqualified defined benefit plans, particularly those that linked payout to a qualified plan or that accepted elections near to retirement. Because of the impracticality of taking advance payment elections in nonqualified defined benefit plans, many employers wish to designate the lump sum as the default form of payment, and they will only offer alternative forms pursuant to subsequent elections. This may involve changing either plan terms or a pre-409a participant election. Either way, we believe it is implicit in Notice that an employer may unilaterally make such a change for a plan as a whole. In addition, because it does not involve an employee election, it would not be subject to constructive receipt. However, such a basic transition question deserves an explicit answer. We are aware that some have felt uncertain whether any transitional changes in payment are permitted without a participant election. However, it makes no sense to constrain employers in this manner. Perhaps even less clear is whether a plan amendment adopted in 2006 can be the basis for paying as a lump sum a benefit that would otherwise commence as an annuity in However, if the participant does not have an election and the change affects the form (but not the time) of payment, we believe this reasonably can and should be permitted. In any case, the final regulations should provide additional guidance on the extent to which a plan sponsor may unilaterally revise its deferral plans pursuant to the basic power to amend plans during 2006 to comply with 409A. Additional Suggestions In General Examples: In several areas, the proposed regulations include helpful examples. The clarity of the final regulations would be significantly enhanced by the more extensive use of examples. Grandfathered Benefits Determining Grandfathered Benefits: Consider a 2004 bonus that, if not deferred, would have been paid in early If no service after December 31, 2004 was required to be paid the bonus, and it was paid pursuant to an objective formula that was fixed as of December 31, 2004, the deferred bonus should be grandfathered. However, the proposed regulations state that the 4
5 grandfathered portion equals the portion of the service provider s account balance as of December 31, 2004, the right to which is earned and vested.... This has caused some to question whether the bonus in this example is grandfathered, because it would not be reflected in the participant s account balance until sometime in This implication should be eliminated. Amendments to Linked Qualified Plans: The proposed regulations extend the period during which payments under a nonqualified plan may be linked to a qualified plan. If the linked qualified plan is amended (as permitted by applicable regulations) to eliminate the requirement to deliver the Section 417 notice at least 30 days in advance, this change should not be a material modification that affects the grandfathered status of the related nonqualified plan. Stock Options Exercise Period Extension: Informal comments by representatives of Treasury/IRS have suggested that the insignificant services rule of Prop. Reg A-1(h)(1)(ii) applies in determining if the exercise period of a stock option has been extended. In other words, if the right to exercise the option ends upon termination of employment, the insignificant services rule would be applied in determining when employment terminates. However, the insignificant services rule is, by its terms, applicable only for purposes of Prop. Reg A-1(h)(1), which defines separation from service for purposes of Section 409A s distribution rules. It is not applicable for purposes of Prop. Reg A-1(b)(5). The final regulations should acknowledge this, or if the insignificant services rule is extended to Prop. Reg A- 1(b)(5), its application there should be prospective. Reimbursement of Post-Separation Expenses Tax Excludible Benefits: Currently, Prop. Reg A-1(b)(9)(iv)(A) implies that excludible reimbursements are not generally excepted from Section 409A, by conditioning the exception for such reimbursements on their continuing for only a limited period. We understand this implication to be unintended (provided there is no choice between excludible benefits and deferred compensation), and it should be eliminated. Payment Disputes: A provision similar to the special rule in Prop. Reg A-3(e), which extends the time for making payment of amounts in dispute, should apply with respect to determining if the reimbursement of postseparation expenses meets the time of payment requirement to be excepted from Section 409A. 5
6 Health Expense Reimbursements: The current exception for reimbursements of health expenses is conditioned on the reimbursements ending within a permitted period. In general, health expenses payments are time limited based on when the expenses are incurred, rather than based on when payments are made. It would be preferable to have the time limit for health expenses expressed based on when expenses are incurred, even if this means a shorter time limit (e.g., until December 31 of the first calendar year beginning after separation). It would be simplest to have no limit on the time of reimbursement, but to accommodate most existing systems at least two years should be allowed for reimbursement once a health expense is incurred (with the extension for disputed payments noted above). Pre-Separation Health Reimbursements: Health expense reimbursements need to be addressed more broadly in order to solve a related problem that can arise when reimbursing health expenses of active employees in the ordinary course. Currently, any failure to satisfy Section 105(h) automatically implicates Section 409A, unless all reimbursements are made within the short-term deferral period, which is impractical. Given the inherent imprecision and antiquated nature of Section 105(h), this is an undesirable result. Therefore, a general rule should be adopted that would exempt health expense reimbursements so long as the coverage does not extend more than a permitted period beyond separation from service (i.e., the period applicable under the exception for post-separation health reimbursements). Alternative Compliance Strategies for Post-Separation Health Benefits: Many arrangements (including, for example, change-in-control arrangements) provide for extended post-separation health benefits that will continue beyond the current permissible period (or a modified permissible period, as describe above). Service recipients obligated to provide these benefits would like to switch to providing payments based on the cost of coverage, and to make the service provider purchase health coverage on an after-tax basis (so that the benefits may be excludible under Section 104(a)(3) and, therefore, Section 105(h) will not cause there to be taxable benefits). For example, the service recipient would periodically pay the service provider an amount that is sufficient to allow the service provider to pay the cost of the health coverage for the period. The issue is whether this payment is considered objectively fixed for purposes of Section 409A. In this regard, it should be permissible to vary the payment based on objective changes in the service providers status (e.g., marriage, divorce, and birth of a child). So long as this variation is applied without regard to whether the service provider changes enrollment, the payment formula should be considered fixed. In addition, varying the payment based on changes in the cost of coverage should be permissible where the plan is a broadly based plan, covering a significant number of active employees. The fact that the employer retains the right to amend the terms of 6
7 the plan should not be a significant concern in light of the broadly based character of the plan. Severance Pay Arrangements Good Reason: Many difficult issues arise in applying the new rules to severance pay arrangements. One key issue relates to individually negotiated employment agreement provisions that permit the employee to resign for "good reason" and receive severance pay. This is a standard provision in executive employment agreements. Typically, the definition of "good reason" covers situations such as demotion and relocation of the executive's principle place of employment. The proposed regulations withhold judgment on whether severance pay will be deemed subject to a substantial risk of forfeiture and thus eligible for the short-term deferral rule if it is conditioned on resignation for good reason. We recommend that the final regulations include a safe harbor under which certain standard good reason formulations will constitute substantial risks of forfeiture in this context and also permit other good reason formulations to qualify for similar treatment based on a facts and circumstances analysis. We also recommend that the severance pay exception set out in Prop. Reg A-1(b)(9)(iii) be expanded to include resignation for good reason along similar lines. Compliance Issues: We recommend that the final regulations set out clear guidance as to how existing employment agreements may be revised to comply with Section 409A. For example, if an ongoing employment agreement contains good reason language that will cause the severance pay provisions of the agreement not to be subject to a substantial risk of forfeiture, may the employment agreement be revised as part of the Q&A-19(a) transition period to delete or revise this good reason language and thereby qualify for the short-term deferral rule? Does it matter whether such an amendment is made at the time of employment termination? In addition, we recommend that the regulations provide that it is permissible to delay the commencement of severance pay until such time as the employee signs a release of claims and the revocation period for such release has expired. Deferral Elections Elections upon First Year of Eligibility: In the case of an annual bonus, the rules for elections in connection with the first year of eligibility provide for prorating a bonus that is earned for the service period based upon the portion of the performance period that is left. This formulation ignores the fact that the bonus for the performance period often has already been prorated down to reflect the shortened service period. In such a case, the statutory requirement that the election only apply to compensation earned after the election can be met by prorating the bonus based on the portion of the service 7
8 period that remains after the date of the election. Thus, for example, assume an employee who is hired half-way through a twelve-month performance period, and who makes an election 30 days later. Also assume the employee s bonus is one half of a twelve-month bonus, based on his/her sixmonth service period. In this case, the employee should be permitted to defer approximately 5/6ths of his/her bonus. Impact of Section 125 Salary Reduction: Prop. Reg A-2(a)(8) allows limited changes in elections under a qualified plan to be made without violating Section 409A, even though these qualified plan elections impact the election under a nonqualified plan. Similar rules should apply to salary reduction elections under section 125 cafeteria plans. Cafeteria plans have nondiscrimination rules, and they must restrict mid-year changes in elections. These features will provide appropriate safeguards for purposes of Section 409A. Separation from Service Different Forms of Payment for Retirees: Many nonqualified plans allow expanded form of payment choice to employees who separate from service through retirement. In general, retirement eligibility is based on attaining both a minimum age and minimum service. The proposed regulations should be revised to make clear that different forms of payment may be paid in this case, even though both age and service conditions are imposed (rather than just age). The failure to permit this would have a sweeping impact employer plans, and it would conflict with long established practices. On the other hand, allowing the inclusion of a reasonable service condition (in addition to age) will not lead to abuses. Retirement During a Window: Plans that provide different forms of payment for employees who separate from service through retirement often extend this to employees who retire during a window program. Under a declared window program, the standards for retirement status are often modified (the age and/or service requirements typically are liberalized). To the extent that the window program meets the criteria of Prop. Reg A-1(b)(9)(v) and the plan prespecifies that window program retirement will be treated as a regular retirement for distribution purposes, it should be permissible to provide the retirement forms of distribution for retirement during a window. Different Forms of Payment for Voluntary and Involuntary Terminees: The proposed regulations already recognize a distinction between voluntary and involuntary separation from service in connection with separation pay. Because this is an established distinction, it would be appropriate to permit different forms of payment in connection with a separation from service depending on whether it is voluntary or involuntary. 8
9 Transfers to Affiliates: In connection with the definition of service recipient s stock, the proposed regulations permit a plan to specify a level of affiliation below 80% that will be used to identify the service recipient (i.e., 50% or, where there is a legitimate business justification, 20%). This same flexibility should apply for purposes of determining whether a separation from service has occurred. This would facilitate the maintenance of deferred compensation for employees who, for example, are transferred to a joint venture. Terminal Leaves: Employers sometime provide leaves of absences to employees that are separating from service (terminal leaves). Under the proposed regulations, leaves of not more than six months are generally recognized. At the same time, the proposed regulations contain rules that disregard a period of employment where only insignificant services are provided. To the extent that there is a bona fide business reason for providing a terminal leave, unrelated to the time of payment of deferred compensation, the final regulations should clarify that a terminal leave of not more than six months can be a bona fide leave of absence. 9
SECTION 409A: A NIGHTMARE OF COMPLEXITY
JULY 25, 2007 VOLUME 3, NUMBER 6 SECTION 409A: A NIGHTMARE OF COMPLEXITY In this newsletter, we will first provide a relatively brief, high level outline of the Section 409A rules, after which we will
More informationIRS Finalizes Regulations Under Section 409A, Finally
April 18, 2007 IRS Finalizes Regulations Under Section 409A, Finally On April 10 th, the IRS issued long-awaited final regulations under Code section 409A. The regulations primarily finalize rules contained
More informationLEGAL ALERT. April 13, 2007
LEGAL ALERT April 13, 2007 IRS Issues Final Section 409A Regulations On April 10, 2007, the Treasury Department and the Internal Revenue Service (the IRS) released the final regulations interpreting section
More informationSection 409A and Severance Arrangements
Section 409A and Severance Arrangements A Lexis Practice Advisor Practice Note by Alan M. Levine, Morrison Cohen LLP Alan M. Levine This practice note discusses how the nonqualified deferred compensation
More information409A PROPOSED REGULATIONS: MORE GUIDANCE AND LIMITED TRANSITION RELIEF
OCTOBER 18, 2005 VOLUME 1, NUMBER 11 409A PROPOSED REGULATIONS: MORE GUIDANCE AND LIMITED TRANSITION RELIEF The proposed regulations generally extend the plan amendment deadline to December 31, 2006, and
More informationGetting Up to Speed on the Final Regulations for Deferred Compensation
Where published May-June 2007 THE TAX EXECUTIVE Getting Up to Speed on the Final Regulations for Deferred Compensation By: Norman J. Misher and David E. Kahen S ection 409A of the Internal Revenue Code
More information12 Separation Pay Arrangements
12 Separation Pay Arrangements Joseph M. Yaffe Skadden, Arps, Slate, Meagher & Flom LLP I. Introduction... II. Key Separation Pay Concepts... A. Separation Pay Plan... B. Separation Pay... C. Window Program...
More informationIRS ISSUES PROPOSED REGULATIONS UNDER CODE SECTION 409A COVERING NEW DEFERRED COMPENSATION RULES
IRS ISSUES PROPOSED REGULATIONS UNDER CODE SECTION 409A COVERING NEW DEFERRED COMPENSATION RULES October 17, 2005 TABLE OF CONTENTS A. EFFECTIVE DATE; TRANSITION RULES...1 1. Effective Date of Regulations;
More informationNavigating the Proposed 409A Regulations-General Rules By Mary K. Samsa, Joyce L. Meyer, and Barbara A. Cronin
Client Memorandum HR Law: Employee Benefits October 2005 Navigating the Proposed 409A Regulations-General Rules By Mary K. Samsa, Joyce L. Meyer, and Barbara A. Cronin On September 29, 2005, the Department
More informationDeferred Compensation for Dummies: The Section 409A Compliance Clock is Ticking
Deferred Compensation for Dummies: The Section 409A Compliance Clock is Ticking OCTOBER 17, 2008 PUBLICATIONS Most of us involved in the practice of law are familiar with the benefits of tax deferral.
More informationLegal Updates & News. IRS Issues Final Section 409A Regulations May 2007 by Timothy G. Verrall, Paul Borden, Patrick McCabe.
Legal Updates & News Legal Updates IRS Issues Final Section 409A Regulations May 2007 by Timothy G. Verrall, Paul Borden, Patrick McCabe Related Practices: Tax On April 10, after keeping the executive
More informationIRS Transition Guidance on Deferred Compensation Legislation
December 30, 2004 IRS Transition Guidance on Deferred Compensation Legislation The IRS recently issued eagerly-awaited preliminary guidance on the rules for nonqualified deferred compensation plans recently
More informationTreasury and IRS Issue Guidance under Section 409A on Correcting Document Failures
Executive Compensation & Employee Benefits January 14, 2010 Treasury and IRS Issue Guidance under Section 409A on Correcting Document Failures This client memorandum describes recent guidance from the
More informationNew IRS Guidance On Deferred Compensation
October 2005 New IRS Guidance On Deferred Compensation The IRS has issued long-awaited Proposed Regulations under new Internal Revenue Code Section 409A, relating to non-qualified deferred compensation.
More informationProposed Modifications/Clarifications to the 409A Regulations
Proposed Modifications/Clarifications to the 409A Regulations By Howard D. Stern, FSA, MAAA Senior Vice President & Actuary The Pangburn Group On June 21 st, 2016, the IRS issued proposed regulations that
More informationPart I. Rulings and Decisions Under the Internal Revenue Code of 1986
This document is referenced in an endnote at the Bradford Tax Institute. CLICK HERE to go to the home page. Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Section 42. Low-Income
More informationNuts & Bolts of Section 409A: Practical Issues to Consider in Every Practice
Nuts & Bolts of Section 409A: Practical Issues to Consider in Every Practice June 9, 2016 Sponsored by the ABA Joint Committee on Employee Benefits and the American College of Employee Benefits Counsel
More informationCompensation of Founders and Key Employees of Emerging Companies After The Enactment of Section 409A * Kenneth R. Hoffman Venable LLP Washington, D.C.
Compensation of Founders and Key Employees of Emerging Companies After The Enactment of Section 409A * Kenneth R. Hoffman Venable LLP Washington, D.C. October 21, 2005 The American Jobs Creation Act of
More informationLEGAL ALERT. September 14, IRS Provides Limited Relief and Additional Guidance Under Code Section 409A
LEGAL ALERT September 14, 2007 IRS Provides Limited Relief and Additional Guidance Under Code Section 409A On September 10, 2007, Treasury and the IRS released Notice 2007-78 (the Notice ), providing limited
More informationExecutive Compensation and Benefits Practice Team October 14, 2004
Client Alert Congress Approves Broad Changes to Nonqualified Deferred Compensation Arrangements Enactment Imminent Executive Compensation and Benefits Practice Team On October 11, 2004, Congress passed
More informationPart III. Administrative, Procedural, and Miscellaneous
Part III. Administrative, Procedural, and Miscellaneous Guidance Under 409A of the Internal Revenue Code Notice 2005 1 I. Purpose and Overview Section 885 of the recently enacted American Jobs Creation
More informationDeferred Compensation Legislation Urgent Need for Guidance
William F. Sweetnam Benefits Tax Counsel Department of the Treasury 1500 Pennsylvania Avenue, NW Room 3050 Washington, DC 20220 Re: Deferred Compensation Legislation Urgent Need for Guidance Dear Bill:
More informationTHE NEW DEFERRED COMPENSATION RULES
THE NEW DEFERRED COMPENSATION RULES FEBRUARY 11, 2005 This memorandum is a supplement to our memorandum dated October 28, 2004, entitled, Responding to the New Deferred Compensation Legislation, regarding
More informationIRS proposes clarifying regulations for nonqualified deferred compensation plans
Important information Plan administration and operation IRS proposes clarifying regulations for nonqualified deferred compensation plans Who s affected These proposed rules are applicable to plan sponsors
More informationNewly Issued 457(f) Proposed Regulations Clarify Rules for Nonqualified Deferred Compensation Provided by Non-Profit and Governmental Entities
Newly Issued 457(f) Proposed Regulations Clarify Rules for Nonqualified Deferred Compensation Provided by Non-Profit and Governmental Entities J. MARC FOSSE The long-awaited Internal Revenue Service (
More informationFurther Guidance on the Application of Section 409A to Nonqualified Deferred Compensation Plans
[4830-01-p] DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-148326-05] RIN 1545-BF50 Further Guidance on the Application of Section 409A to Nonqualified Deferred Compensation Plans
More informationImplications. Background
December 15, 2008 Tax Alert 2008-1856 Compensation & Benefits IRS Issues Proposed Regulations on Calculating Includible Amounts Under Section 409A(a) The IRS has issued proposed regulations on calculating
More informationRecent Developments Affecting Qualified and Nonqualified Deferred Compensation, Part I: New Proposed Regulations
PRACTICE POINT Recent Developments Affecting Qualified and Nonqualified Deferred Compensation, Part I: New Proposed Regulations By David Pratt, Professor of Law, Albany Law School, Albany, NY There have
More informationINVESTMENT FUNDS ALERT
October 15, 2004 INVESTMENT FUNDS ALERT NEW LEGISLATION RELATING TO NONQUALIFIED DEFERRED COMPENSATION PLANS Congress has passed, and President Bush is expected to sign into law, the American Jobs Creation
More informationNew Deferred Compensation Legislation Summary and Action Steps
October 29, 2004 New Deferred Compensation Legislation Summary and Action Steps The House and Senate recently approved far-reaching changes in the federal tax laws that apply to nonqualified deferred compensation
More informationGlobal Employer Rewards. Nonqualified Deferred Compensation: The Effect of Section 409A Now and in the Future
Global Employer Rewards Nonqualified Deferred Compensation: The Effect of Section 409A Now and in the Future 1 Contents Introduction...1 Section 409A: Overview...2 Nonqualified Deferred Compensation Plans:
More informationAFFILIATED HEALTHCARE SYSTEMS NONQUALIFIED DEFERRED COMPENSATION PLAN ARTICLE I PURPOSE
AFFILIATED HEALTHCARE SYSTEMS NONQUALIFIED DEFERRED COMPENSATION PLAN ARTICLE I PURPOSE 1.1 Purpose of Plan. Effective as of the 1st day of January, 2018, Affiliated Healthcare Systems ( AHS ), a Maine
More informationIn October 2004, the American Jobs Creation Act
Long-Awaited Final Regulations Under Code Sec. 409A Are Issued As Transition Relief Nears an End * By David G. Johnson and Elizabeth Buchbinder ** Dave Johnson and Elizabeth Buchbinder discuss the new
More informationADOPTION AGREEMENT FOR FIS BUSINESS SYSTEMS LLC STANDARDIZED MONEY PURCHASE PLAN
ADOPTION AGREEMENT FOR FIS BUSINESS SYSTEMS LLC STANDARDIZED MONEY PURCHASE PLAN CAUTION: Failure to properly fill out this Adoption Agreement may result in disqualification of the Plan. EMPLOYER INFORMATION
More informationSummary Plan Description
Summary Plan Description Prepared for Progressive Quality Care, Inc. Introduction Effective 01/01/2004, Progressive Quality Care, Inc. has amended the Progressive Quality Care, Inc. 401(k) Plan designed
More informationNONQUALIFIED DEFERRED COMPENSATION: THE EFFECT OF THE NEW RULES NOW AND IN THE FUTURE
NONQUALIFIED DEFERRED COMPENSATION: THE EFFECT OF THE NEW RULES NOW AND IN THE FUTURE By Deloitte Tax LLP This special report was authored by Deborah Walker, partner (former deputy to the benefits tax
More informationU.S. Chamber of Commerce
U.S. Chamber of Commerce www.uschamber.com 1615 H Street, NW Washington, DC 20062 January 3, 2006 Courier s Desk Internal Revenue Service 1111 Constitution Avenue, N.W. Washington, DC 20224 ATTN: C:PA:LPD:PR
More informationCOMMENTARY JONES DAY. Section 409A operates in three steps. First, it identifies compensation it considers nonqualified deferred
February 2006 JONES DAY COMMENTARY Employee Benefits & Executive Compensation Section 409A s Impact on Private Companies Section 409A was added to the Internal Revenue Code in October 2004 to provide strict
More informationApril 24, Filed electronically via to
April 24, 2012 Filed electronically via e-mail to Notice.Comments@irscounsel.treas.gov Internal Revenue Service Attn: CC:PA:LPD:PR (Notice 2012-25) Room 5203 P.O. Box 7603 Ben Franklin Station Washington,
More informationNewly Issued Code Section 457(f) Proposed Regulations Offer Clarity and New Opportunities in Designing Executive Compensation
A P R O F E S S I O N A L C O R P O R A T I O N ERISA AND EMPLOYEE BENEFITS ATTORNEYS Newly Issued Code Section 457(f) Proposed Regulations Offer Clarity and New Opportunities in Designing Executive Compensation
More informationTable II: Other Key Provisions in HR 1776 of Interest to Governmental Plans
Table II: Other Key Provisions in HR 1776 of Interest to Governmental Plans For a copy of HR 1776, visit http://www.nctr.org/content/pdf/portman_full_bill03.pdf See Table I for Principal Provisions in
More informationTEAMHEALTH 401(K) PLAN SUMMARY PLAN DESCRIPTION
TEAMHEALTH 401(K) PLAN SUMMARY PLAN DESCRIPTION TABLE OF CONTENTS INTRODUCTION TO YOUR PLAN What kind of Plan is this?... 1 What information does this Summary provide?... 1 ARTICLE I PARTICIPATION IN THE
More informationThis Summary Plan Description is a summary of the key provisions of the World Wide Technology, Inc. Employee Salary Deferral Retirement Program.
This Summary Plan Description is a summary of the key provisions of the World Wide Technology, Inc. Employee Salary Deferral Retirement Program. The summary is an important legal instrument with legal
More informationChapter VI. Specialized Types of Retirement Income Plans Midwinter Report
Chapter VI Specialized Types of Retirement Income Plans 2017 Midwinter Report American Bar Association Section of Labor and Employment Law Employee Benefits Committee February 8-11, 2017 Austin, Texas
More informationNovember 5, Comments on Proposed Regulations under Section 125 of the Internal Revenue Code (Cafeteria Plans)
November 5, 2007 CC:PA:LPD:PR (REG-142695-05) Room 5203 Internal Revenue Service POB 7604 Ben Franklin Station Washington, D.C. 20044 Re: Comments on Proposed Regulations under Section 125 of the Internal
More informationLANCASTER GENERAL HEALTH RETIREMENT INCOME 403(B) ACCOUNT SUMMARY PLAN DESCRIPTION
LANCASTER GENERAL HEALTH RETIREMENT INCOME 403(B) ACCOUNT SUMMARY PLAN DESCRIPTION TABLE OF CONTENTS INTRODUCTION TO YOUR PLAN ARTICLE I PARTICIPATION IN THE PLAN Am I eligible to participate in the Plan?...
More informationOctober 1, 2010 NEW NONDISCRIMINATION REQUIREMENTS FOR INSURED GROUP HEALTH PLANS
October 1, 2010 NEW NONDISCRIMINATION REQUIREMENTS FOR INSURED GROUP HEALTH PLANS The Patient Protection and Affordable Care Act ( PPACA ) extends the nondiscrimination requirements of section 105(h) of
More informationSAVE MART SUPERMARKETS RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION
SAVE MART SUPERMARKETS RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION TABLE OF CONTENTS INTRODUCTION TO YOUR PLAN What kind of Plan is this?... 1 What information does this Summary provide?... 1 ARTICLE
More informationINTERIM GUIDANCE ON APPLICATION OF 457A. A. Section 457A In General
Interim Guidance Under Section 457A Notice 2009 8 PURPOSE This notice provides interim guidance on the application of 457A to nonqualified deferred compensation plans of nonqualified entities. Section
More informationJoint Committee on Employee Benefits Q&A with the U.S. Treasury Dept. and Internal Revenue Service based on meeting with staff May 12, 2000
Joint Committee on Employee Benefits Q&A with the U.S. Treasury Dept. and Internal Revenue Service based on meeting with staff May 12, 2000 The following questions and answers are based on informal discussions
More informationCENTRAL MICHIGAN UNIVERSITY 403(b) SUPPLEMENTAL TAX DEFERRAL PLAN
CENTRAL MICHIGAN UNIVERSITY 403(b) SUPPLEMENTAL TAX DEFERRAL PLAN (Restated January 1, 2009) Warner Norcross & Judd LLP 900 Fifth Third Center 111 Lyon Street, N.W. Grand Rapids, Michigan 49503-2487 TABLE
More informationIRS Issues Proposed Regulations on Hybrid Plans
IRS Issues Proposed Regulations on Hybrid Plans On December 27, 2007, the IRS issued proposed regulations on provisions in the Pension Protection Act of 2006 affecting primarily cash balance and other
More informationSummary Plan Description. ACT, Inc. Defined Contribution Retirement Plan
Summary Plan Description ACT, Inc. Defined Contribution Retirement Plan INTRODUCTION ACT, Inc. has restated the ACT, Inc. Defined Contribution Retirement Plan (the Plan ) to help you and other Employees
More informationUpdate on 403(b) and 457(f) Plans
Update on 403(b) and 457(f) Plans Representing & Managing Tax Exempt Organizations April 28-29, 2011 Gregory L. Needles Morgan, Lewis & Bockius LLP Washington, DC Cheryl E. Press Office of Chief Counsel
More informationCOMMENTARY JONES DAY. Importantly, the Notice provides generous transitional relief for correcting certain document failures in 2010.
February 2010 JONES DAY COMMENTARY IRS Releases Section 409A Documentary Correction Program Recently issued Notice 2010-6 ( Notice 2010-6 or the Notice ) provides taxpayers with the opportunity to voluntarily
More informationADOPTION AGREEMENT FOR FIS BUSINESS SYSTEMS LLC NON-STANDARDIZED PROFIT SHARING PLAN
ADOPTION AGREEMENT FOR FIS BUSINESS SYSTEMS LLC NON-STANDARDIZED PROFIT SHARING PLAN CAUTION: Failure to properly fill out this Adoption Agreement may result in disqualification of the Plan. Non-Standardized
More informationDEFERRED COMPENSATION PLANS. 2 OVERVIEW OF 409A AND 457(F). 3 SHORT-TERM DEFERRALS. 6 ADMINISTRATION OF 457(F) SHORT-TERM DEFERRAL PLANS.
Table of Contents DEFERRED COMPENSATION PLANS... 2 OVERVIEW OF 409A AND 457(F)... 3 SHORT-TERM DEFERRALS... 6 ADMINISTRATION OF 457(F) SHORT-TERM DEFERRAL PLANS... 8 ANNUAL CHECKLIST FOR 457(F) PLAN SPONSORS...
More informationAutomatic Rollovers March 28 th Deadline is Here
Automatic Rollovers March 28 th Deadline is Here The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) added a new rule section 401(a)(31)(B) of the Internal Revenue Code of 1986, as amended
More informationSUMMARY COMPARISON OF CURRENT LAW AND THE PRINCIPAL PROVISIONS OF THE PENSION PROTECTION ACT OF 2006: 1 MULTIEMPLOYER PENSION FUNDING REFORMS
August 17, 2006 SUMMARY COMPARISON OF CURRENT LAW AND THE PRINCIPAL PROVISIONS OF THE PENSION PROTECTION ACT OF 2006: 1 MULTIEMPLOYER PENSION FUNDING REFORMS Contents Page Minimum Required Contributions
More informationProposed Code Section 409A Income Inclusion Regulations
Proposed Code Section 409A Income Inclusion Regulations Prop. Reg. 1.409A-4. Calculation of Amount Includible in Income and Additional Income Taxes Table of Contents (a) Amount includible in income due
More informationSUMMARY PLAN DESCRIPTION FOR. Florida Tech Retirement Plan
SUMMARY PLAN DESCRIPTION FOR REFLECTING THE TERMS OF THE PLAN EFFECTIVE AS OF January 01, 2019 Contract No. FIT-001 Table of Contents Article 1... Introduction Article 2... General Plan Information and
More informationIRS Issues Long-Awaited Proposed Regulations under Section 409A of the Internal Revenue Code
IRS Issues Long-Awaited Proposed Regulations under Section 409A of the Internal Revenue Code NOVEMBER 11, 2005 Background Code Section 409A On September 29, 2005, the Internal Revenue Service ( IRS ) and
More informationRecent Developments for Sections 409A and 457: Proposed Regulations and Chief Counsel Memorandum
CLIENT MEMORANDUM Recent Developments for Sections 409A and 457: Proposed Regulations and Chief Counsel Memorandum September 6, 2017 Earlier this summer, the Office of the Chief Counsel of the Internal
More informationMay 3, McDermott Health Care HR Center
May 3, 2017 McDermott Health Care HR Center Ruth M. Wimer Mary K. Samsa, CPA, MST, JD Joseph K. Urwitz Direct: (202) 756-8614 Direct: (312) 984-2142 Direct: (617) 535-3854 Email: rwimer@mwe.com Email:
More informationDependent Care Flexible Spending Arrangement
Dependent Care Flexible Spending Arrangement for The State of Louisiana An ERISA Exempt Employer Amended as of January 1, 2015 1993 Office of Group Benefits Division of Administration State of Louisiana
More informationSUMMARY PLAN DESCRIPTION FOR. DAYMON WORLDWIDE INC. 401(k) PROFIT SHARING PLAN AMENDMENT AND RESTATEMENT EFFECTIVE JANUARY 1, 2016
SUMMARY PLAN DESCRIPTION FOR DAYMON WORLDWIDE INC. 401(k) PROFIT SHARING PLAN AMENDMENT AND RESTATEMENT EFFECTIVE JANUARY 1, 2016 Table of Contents Article 1... Introduction Article 2... General Plan Information
More informationAnatomy of a Deferred Compensation Plan
Executive Compensation Basics A Webinar Series Anatomy of a Deferred Compensation Plan Webinar 3 of 4 June 17, 2014 www.morganlewis.com Presenters: Daniel Hogans Randy McGeorge Leslie DuPuy Morgan, Lewis
More informationThe Alert Guidelines are tools used by Employee Plans Specialists during their review of retirement plans and are available to plan sponsors to use
The Alert Guidelines are tools used by Employee Plans Specialists during their review of retirement plans and are available to plan sponsors to use before submitting determination letter applications to
More informationEmployee Benefits Client Alert: October 2008
Employee Benefits Client Alert: October 2008 Q&A ON 409A: COMPLIANCE DEADLINE FOR DEFERRED COMPENSATION PLANS AND AGREEMENTS Q-1: Why should service providers and service recipients be concerned with Internal
More informationExecutive Compensation, Employee Benefits and ERISA Alert
Executive Compensation, Employee Benefits and ERISA Alert July 5, 2016 If you read one thing... The Internal Revenue Service (IRS) has issued proposed regulations on the application of Code Section 409A
More informationImpact of New IRS Rules on Severance Arrangements and Other Deferred Compensation
Impact of New IRS Rules on Severance Arrangements and Other Deferred Compensation Margo Hasselman Greenough Jani K. Rachelson Tolsun Waddle with contributions from Richard Harmon Qualified vs Nonqualified
More informationELIGIBLE 457 PROTOTYPE PLAN SALARY REDUCTION CONTRIBUTIONS ADOPTION AGREEMENT
ELIGIBLE 457 PROTOTYPE PLAN SALARY REDUCTION CONTRIBUTIONS ADOPTION AGREEMENT ELIGIBLE 457 PROTOTYPE PLAN SALARY REDUCTION CONTRIBUTIONS ADOPTION AGREEMENT The undersigned, City and County of Denver (referred
More informationUniversity of New England Defined Contribution Plan. Summary Plan Description
University of New England Defined Contribution Plan Summary Plan Description Revised Effective as of January 1, 2015 Table of Contents INTRODUCTION... 4 ELIGIBILITY... 5 Am I eligible to participate in
More informationMASON COMPANIES RETIREMENT AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION
MASON COMPANIES RETIREMENT AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION Additional copies of the Summary Plan Description may be obtained at www.millimanbenefits.com TABLE OF CONTENTS INTRODUCTION TO YOUR
More informationA Revolution in the World of Deferred Compensation
Originally published in: The Tax Executive November 15, 2004 A Revolution in the World of Deferred Compensation By: Norman J. Misher and David E. Kahen I. Introduction On October 22, 2004, President Bush
More informationSPRINGS WINDOW FASHIONS 401(K) RETIREMENT PLAN SUMMARY PLAN DESCRIPTION
SPRINGS WINDOW FASHIONS 401(K) RETIREMENT PLAN SUMMARY PLAN DESCRIPTION January 1, 2016 TABLE OF CONTENTS INTRODUCTION TO YOUR PLAN What kind of Plan is this?... 1 What information does this Summary provide?...
More informationNONQUALIFIED DEFERRED COMPENSATION & CODE 409A
NONQUALIFIED DEFERRED COMPENSATION & CODE 409A I. REVIEW OF NQDC PRIOR TO CODE 409A A. Nonqualified Deferred Compensation ( NQDC ) Plan - a plan, agreement, or arrangement between an employer and an employee
More informationEPCRS: REV. PROC
The Pension Library ERISA Newsletter Number 2013-1 EPCRS: REV. PROC. 2013-12 Table of Contents 1 Introduction... 2 2 Overview... 2 2.1 SCP.... 2 2.2 VCP.... 4 2.3 Audit CAP.... 5 2.4 Complete and appropriate
More informationSUMMARY PLAN DESCRIPTION PIXAR Employee's 401(k) Retirement Plan
SUMMARY PLAN DESCRIPTION PIXAR Employee's 401(k) Retirement Plan This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific
More informationSummary Plan Description
Summary Plan Description Prepared for Kenyon College Tax Deferred Annuity Plan INTRODUCTION Kenyon College has restated the Kenyon College Tax Deferred Annuity Plan (the Plan ) to help you and other Employees
More informationHarris 1. Feedback for Notice (Guidance on the Application of 162(m) 1 ) as of 10/30/2018. NOTICE , SECTION NUMBER Section III.B.
Feedback for Notice 2018-68 (Guidance on the Application of 162(m) 1 ) as of 10/30/2018 Section III.B. Remuneration Provided Pursuant to a Written Binding Contract Clarify that compliance with requirements
More informationWorth the Wait? The Final Section 409A Regulations
T O O U R F R I E N D S A N D C L I E N T S M e m o r a n d u m May 2, 2007 www.friedfrank.com Worth the Wait? The Final Section 409A Regulations The Treasury Department has issued final regulations under
More informationINSIDE THIS ISSUE: The Defined Benefit Pension Plan and 412i. Page 2 Introduction Defined Benefit v. Defined Contribution Plan.
Legal & Tax Trends A Publication of Business and Individual Planning December 2002 INSIDE THIS ISSUE: The Defined Benefit Pension Plan and 412i Page 2 Introduction Defined Benefit v. Defined Contribution
More informationPension Protection Act of 2006: What to do in 2007
DECEMBER 1, 2006 VOLUME 2, NUMBER 12 Pension Protection Act of 2006: What to do in 2007 This newsletter looks to 2007 and highlights effective by (913) 685-0749 PPA changes some of which are already effective,
More informationThis Summary Plan Description is a summary of the key provisions of the Seibels Employees' Profit Sharing and Savings Plan.
This Summary Plan Description is a summary of the key provisions of the Seibels Employees' Profit Sharing and Savings Plan. The summary is an important legal instrument with legal and tax implications.
More informationPublic companies will need to identify specified employees in advance in order to comply with document requirements.
Final Deferred Compensation Regulations On April 10, 2007, the IRS issued its long-anticipated Final Regulations governing deferred compensation plans under Code Section 409A ( 409A ). The Final Regulations
More informationPENSION EDUCATOR SERIES GLOSSARY
PENSION EDUCATOR SERIES GLOSSARY 2 1% Owner An employee who owns more than 1% of the outstanding stock or more than 1% of the total combined voting power of all stock in a corporation; or more than 1%
More informationAdvanced Designs. Pocket Guide. Questions & Answers Regarding IRC Section 409A and the Final IRC Section 409A Regulations
Advanced Designs Pocket Guide Questions & Answers Regarding IRC Section 409A and the Final IRC Section 409A Regulations Applications for Using Life Insurance AD-OC-792A This material is not intended to
More informationDecember 21, CC:PA:LPD:PR (REG ) Room 5205 Internal Revenue Service P.O. Box 7604 Ben Franklin Station Washington, DC 20044
December 21, 2012 CC:PA:LPD:PR (REG-134974-12) Room 5205 Internal Revenue Service P.O. Box 7604 Ben Franklin Station Washington, DC 20044 CC:PA:LPD:PR (REG-134974-12) Courier s Desk Internal Revenue Service
More informationU.S. Tax Advisory. Final section 409A regulations What you need to know and do now
U.S. Tax Advisory. Final section 409A regulations What you need to know and do now On April 10, 2007, the U.S. Treasury Department and Internal Revenue Service issued final regulations under section 409A
More informationJanuary 12, CC:PA:LPD:PR (REG ) Room 5203 Internal Revenue Service PO Box 7604 Ben Franklin Station Washington, DC 20044
January 12, 2011 CC:PA:LPD:PR (REG 132554 08) Room 5203 Internal Revenue Service PO Box 7604 Ben Franklin Station Washington, DC 20044 RE: Additional Rules Regarding Hybrid Retirement Plans To Whom It
More informationDEVEREUX DEFINED CONTRIBUTION RETIREMENT PLAN. Summary Plan Description
DEVEREUX DEFINED CONTRIBUTION RETIREMENT PLAN Summary Plan Description Issued: January 1, 2017 TABLE OF CONTENTS INTRODUCTION... 1 ELIGIBILITY AND PARTICIPATION... 2 Eligibility... 2 Participation... 2
More informationAdvanced Markets Because You Asked
Advanced Markets Because You Asked June 2007 Answers to Questions Frequently Asked of the Advanced Markets Group The Impact of Section 409A on Nonqualified Deferred Compensation Plans Advanced Markets
More information403(b) PLAN BASIC PLAN DOCUMENT
403 PLAN BASIC PLAN DOCUMENT TABLE OF CONTENTS SECTION 1 PLAN DEFINITIONS 1.01 Account... 1 1.02 Account Balance... 1 1.03 Accumulated Benefit... 1 1.04 Actual Contribution Percentage Test (ACP Test)...
More informationCOMMENTS CONCERNING CODE SECTION 403(b) REGULATIONS PROJECT
COMMENTS CONCERNING CODE SECTION 403(b) REGULATIONS PROJECT The following comments (the Comments ) are the individual views of the members of the Section of Taxation who prepared them and do not represent
More informationBORGWARNER INC. RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION JANUARY 1, 2017
BORGWARNER INC. RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION JANUARY 1, 2017 TABLE OF CONTENTS Page INTRODUCTION AND HIGHLIGHTS... 1 ELIGIBILITY... 7 CONTRIBUTIONS... 9 LIMITATIONS... 19 VESTING...
More informationDEVEREUX DEFINED CONTRIBUTION RETIREMENT PLAN. Summary Plan Description
DEVEREUX DEFINED CONTRIBUTION RETIREMENT PLAN Summary Plan Description Issued: January 1, 2019 TABLE OF CONTENTS INTRODUCTION... 1 ELIGIBILITY AND PARTICIPATION... 2 Eligibility... 2 Participation... 2
More informationCHS/COMMUNITY HEALTH SYSTEMS, INC. STANDARD 401(K) PLAN SUMMARY PLAN DESCRIPTION JANUARY 1, 2014
CHS/COMMUNITY HEALTH SYSTEMS, INC. STANDARD 401(K) PLAN SUMMARY PLAN DESCRIPTION JANUARY 1, 2014 TABLE OF CONTENTS PAGE INTRODUCTION TO YOUR PLAN What kind of Plan is this?... 1 What information does this
More informationNortheast Georgia Health System, Inc. and Affiliated Companies Pension Plan
Northeast Georgia Health System, Inc. and Affiliated Companies Pension Plan Overview Introduction The Northeast Georgia Health System, Inc. and Affiliated Companies Pension Plan (the Plan) is designed
More informationFoley & Lardner LLP. May 13, :00 p.m. 2:00 p.m. EST
Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative of clients 321 N. Clark Street, Suite 2800, Chicago, IL 60610 312.832.4500 Foley
More information