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Deferred compensation is only available to employees of public entities, senior management, and other highly compensated employees of companies. Although DC is not restricted to public companies, there must be a serious risk that a key employee could leave for a competitor, and deferred comp is a "sweetener" to try to entice them to stay.
The 457 plan is a type of nonqualified, [1] [2] tax advantaged deferred-compensation retirement plan that is available for governmental and certain nongovernmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre tax or after-tax (Roth) basis.
Section 409A was enacted, in part, in response to the practice of Enron executives accelerating the payments under their deferred compensation plans in order to access the money before the company went bankrupt, and also in part in response to a history of perceived tax-timing abuse due to limited enforcement of the constructive receipt tax ...
Deferred compensation is a way for employees to reduce their tax burden while ensuring their economic security in their golden years. Deferred compensation plans with a long vesting period are ...
These tax-deferred retirement plans allow you to contribute pre-tax dollars to an account. With a traditional IRA or 401(k), you only pay taxes on your investments when you withdraw from the account.
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The packages include features such as retirement plans and deferred compensation, as well as post-retirement perks and guaranteed consulting fees. From 2000 to 2011, the top 21 "walk-away" packages given to CEOs were worth more than $100 million each and came to a total of almost $4 billion. [111]
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