COLI/BOLI

In This Week’s Tax News – 17.11.17

Topics: COLI/BOLI, Congress, Estate tax, NQDC, Tax reform

By Chris Morton, Armstrong Robinson, and David Hollingsworth Friday, 17 November 2017 Don’t Forget Tune in Tuesday, November 21 at 11am Eastern for the next installment in our webinar series on this topic. Missed today’s webinar? Click here for the recording. Republicans continued to meet their deadlines for tax reform. However, a number of issues…

Part 1 – The Fundamentals of Non-Qualified Deferred Compensation Plans

Topics: COLI/BOLI, NQDC

Because of restrictions and limitations in the tax and ERISA rules that apply to tax-qualified retirement plans, many employers have created non-qualified deferred compensation (“NQDC”) plans to provide additional compensation and retirement benefits to key executives. There are two main types of NQDC plans: (1) defined contribution and (2) defined benefit. A general understanding of…

Substantial Risk of Forfeiture – What Is It and What Does It Do?

Topics: COLI/BOLI, NQDC

Substantial risk of forfeiture is a concept relevant to the taxation of non- cash compensation under Internal Revenue Code (“Code”) §83 and to the taxation of deferred compensation under Code §§409A and 457(f). To create a substantial risk of forfeiture, an employer must generally impose a service- or performance-based restriction on the employee’s right to…

Executive Compensation Planning: What the Future May Hold & What Can Be Done Now.

Topics: COLI/BOLI, NQDC

While President Trump and the Republican-controlled Congress have promised major tax reform, little is known about the specifics that may affect executive compensation and retirement planning. Republican leaders face significant obstacles as they work to enact tax reform this year, however, based upon stated goals and prior legislative proposals, many expect changes to the taxation…

What Is the Pay Ratio Rule & Why Should You Care

Topics: COLI/BOLI, NQDC

Although the disclosure under the pay-­ratio rule for calendar-­year reporting companies likely will not be required until the spring of 2018 when such companies file their proxy statements in respect of 2017, in light of the complexity and anticipated implications associated with the disclosure, companies are advised to begin formulating their implementation approach now.

Proposed Section 409A Regulations Published

Topics: 409A, COLI/BOLI

The IRS recently issued proposed regulations supplementing the existing regulations and guidance on the application of Code Section 409A to nonqualified deferred compensation arrangements. As a whole, the proposed regulations clarify existing rules rather than making substantive changes to Section 409A. The proposed regulations will become effective when they are published as final regulations.

Tax Court Decides Purported Section 419(e) Plan is Both Deferred Compensation and Split-Dollar

Topics: COLI/BOLI, Estate planning, NQDC, Split-dollar

In this case, the Tax Court ruled that both the deferred compensation rules and the split-dollar life insurance regulations can apply to the same transaction in a manner that results in (1) disallowance of deductions for employer contributions and full income tax inclusion of the vested accrued benefits of highly compensated employees.

Tax Court Decides Purported Section 419(e) Plan is Both Deferred Compensation and Split-Dollar

Topics: COLI/BOLI, Estate planning, NQDC, Split-dollar

In this case, the Tax Court ruled that both the deferred compensation rules and the split-dollar life insurance regulations can apply to the same transaction in a manner that results in (1) disallowance of deductions for employer contributions and full income tax inclusion of the vested accrued benefits of highly compensated employees.

Key Employee Compensation 101- Favorable Economic Conditions Make Effective Key Employee Compensation Programs Critical.

Topics: COLI/BOLI, General life insurance, Policy loans

Effective key employee compensation programs serve a myriad of functions, such as recruitment, motivation, performance recognition, retention, alignment with shareholder interests, and succession planning. Program design options and benefits are voluminous and provide employers with extensive flexibility to meet the specific desires and needs of both the employer and the employees.