COVID-19 and nonqualified deferred compensation plans

Further Insights on COVID-19 and Nonqualified Deferred Compensation Plans

Fulcrum Partners. Deferred Compensation News

Deferred Compensation News is pleased to provide this Fulcrum Partners report, prepared and originally published by Principal Life, a member of the Principal Financial Group®. With socioeconomic and regulatory landscapes changing day by day and sometimes hour by hour, both plan providers and plan participants are faced with new and unexpected issues.

Does Furlough Constitute a Separation from Service Under IRC 409A

Does Furlough Constitute a Separation from Service Under IRC 409A

Fulcrum Partners. Deferred Compensation News

The COVID-19 pandemic has brought operational challenges and financial strain to businesses in every sector. While some organizations have terminated employees, other businesses have been able to furlough some of, or all, their workforce instead. How the employer handles the furlough is important for many reasons, including how the guidelines of Internal Revenue Code Section 409A (IRC 409A) impact decisions made by both employer and employee.

covid unforeseen 409

COVID-19 and the Unforeseen Financial Emergency Under IRC 409A

Fulcrum Partners. Deferred Compensation News

Internal Revenue Code Section §409A (IRC 409A) regulations govern the design and administration of nonqualified executive benefit plans. Nonqualified executive benefit plans have very specific rules on the form and timing of participant distributions and, generally, offer little flexibility on changing the form or timing of the distributions following the submission of the election form. One of the exceptions in the 409A regulations for altering previously submitted distribution elections is addressed under the unforeseeable emergency provisions.

The 401k Excess Contribution Solution | Offsetting the 401(k) Refund

Offsetting the 401(k) Refund with a Nonqualified Deferred Compensation Plan

Fulcrum Partners. Deferred Compensation News

Download report as a PDF The 401(k) Excess Contribution Solution To help ensure that a 401(k) plan does not favor business owners or other highly compensated employees (HCEs), plan sponsors are required to perform specific nondiscrimination tests. The Actual Deferral Percentage test (ADP) is used to help determine a 401(k) plan’s deferral limits. IRC Section 401(k)(3)(A)(ii) established the ADP test …

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Deductible Compensation Under the “New” Sec. 162(m)

Fulcrum Partners. Executive Benefits News

As attorney and author of the Executive Compensation blog, Mike Melbinger, looks more closely at the recent IRS guidance on the revisions to Tax Code Sec. 162(m), we continue to share his insights here on Fulcrum Partners News. To better understand the new tax laws and the related guidance recently published by the IRS, review Rethinking Executive Compensation While Awaiting …