NQDC Plans and Employer Liability in Cases of Adverse Tax Consequence

Fulcrum Partners Executive Benefits News

McCarter & English, LLP, has authored an insightful look at employer responsibility in administering Nonqualified Deferred Compensation Plans (NQDC Plans), and the potential liability a company has when Plan participants face adverse tax consequences because of the company’s actions (or failure to take action).

We’ve included below the full text of their article that discusses rulings by a federal district court in the case of Davidson v. Henkel Corp. The court ruled that the Henkel Corporation was liable to nonqualified deferred compensation (“NQDC”) plan participants for additional FICA taxes the Plan participants owed as a result of Henkel’s failure to follow the “special timing rule” for FICA withholding.

Source: http://www.jdsupra.com/legalnews/employers-properly-administer-nonqualif-85228/