NQDC

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.

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.

Employee Stock Ownership Plans – Tax Considerations & Planning for Repurchases.

Topics: COLI/BOLI, NQDC

Thursday, July 9, 2015WRM#15-25 The WRMarketplace is created exclusively for AALU Members by the AALU staff and Greenberg Traurig, one of the nation’s leading tax and wealth management law firms. The WRMarketplace provides deep insight into trends and events impacting the use of life insurance products, including key take-aways, for AALU members, clients and advisors.…

Better Consult the Oracle: 8 Key Questions for Code § 409A Compliance – The Gatekeeper to Structuring Effective Deferred Compensation Arrangements.

Topics: 409A, COLI/BOLI, NQDC

Thursday, June 11, 2015WRM#15-21 The WRMarketplace is created exclusively for AALU Members by the AALU staff and Greenberg Traurig, one of the nation’s leading tax and wealth management law firms. The WRMarketplace provides deep insight into trends and events impacting the use of life insurance products, including key take-aways, for AALU members, clients and advisors.…

Nonqualified Deferred Compensation Section 409A Compliance

Topics: 409A, COLI/BOLI, NQDC

A Chief Counsel Advice memorandum of the Internal Revenue Service advises that a pre-vesting plan correction will not “save” a nonqualified deferral plan’s failure to comply with Section 409A of the Internal Revenue Code (“Section 409A”) if benefits vest before the last day of the tax year in which the correction was made.