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The effects of Section 409A are far-reaching, because of the exceptionally broad definition of "deferral of compensation." 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 ...
Deferred compensation is an arrangement in which a portion of an employee's wage is paid out at a later date after which it was earned. Examples of deferred compensation include pensions, retirement plans, and employee stock options.
Unfunded deferred compensation plans offer very flexible benefit structures compared to qualified retirement plans, even after the enactment of new Internal Revenue Code IRC §409A (discussed below). Account-based plans: Elective deferrals are credited to an account in the participant's name along with any company contributions (such as ...
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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 ...
In 2004, Congress passed a tax act that added Section 409A to the tax code and applies to deferred nonqualified compensation, which also covers some 457(f) plans. This was in response to the executive bonus plans given to key employees at Enron, which allowed them early access to their deferred compensation if financial conditions of the ...
Continue reading → The post Executive Deferred Compensation Plans appeared first on SmartAsset Blog. Are you maxing out the 401(k) plan you have at work every year? Do you still have money left ...
A 457(b) retirement plan is an employer-sponsored deferred compensation plan for employees of state and local government agencies and some tax-exempt organizations. Income taxes: If you choose to ...