409A Guidance on Nonqualified Deferred Compensation Plans: Compliance Strategies

Implications of Tax Reform, Definition of Payment, Exemptions, Permitted Payments, Remedies and More

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, March 7, 2018

Recorded event now available

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Program Materials

This CLE webinar will provide employee benefits counsel and advisers with a detailed review of the regulations under 409A. The panel will outline the existing 409A regulations, lingering questions under tax reform, and compliance strategies.

Description

IRC Section 409A establishes a complex regime for regulating nonqualified deferred compensation plans providing strict requirements to be tax deferred. Failure to adhere to such requirements results in deferred amounts being included in gross income to the extent not subject to forfeiture and not previously included in gross income.

In order to maintain the benefits of a nonqualified deferred compensation plan and avoid additional tax and penalties, counsel must have knowledge relating to: (1) the reach of Section 409A, (2) the exemptions under Section 409A (such as relaxed rules under the short-term deferral exemption and clarifications under the severance pay plan exemption), (3) the permitted payment events that comply with Section 409A (such as payments on death, separation from service, or under certain earn-outs or escrows in mergers), and (4) the remedies or solutions available, or unavailable, if an arrangement violates Section 409A (such as narrowing the ability to correct unvested noncompliant payments).

Benefits counsel must understand the impact of Section 409A in order to advise their clients on compliance best practices.

Listen as our panelists highlight the critical aspects of 409A regulations and strategies for compliance. Additionally, the panel will discuss questions that remain unanswered, and new questions that may arise under tax reform.

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Outline

  1. An overview of Section 409A regulations and impact on benefit plans
  2. Existing practices that violate Section 409A
  3. Compliance strategies for employee benefits counsel

Benefits

The panel will review these and other key issues:

  • Best practices to avoid Section 409A violations
  • The flexibility to accelerate or defer payments of deferred compensation
  • The available options to use Section 409A exemptions
  • The granting of 409A exempt stock rights to individuals commencing employment
  • The limitations on the opportunity to make corrections of unvested amounts
  • The methods to consider after tax reform

Faculty

Mort, Marshall
Marshall Mort

Atty
Fenwick & West

Mr. Mort focuses his practice on representation of public and private technology and life sciences companies in a wide...  |  Read More

Andersson, Hans
Hans Andersson

Atty
Fenwick & West

Mr. Andersson focuses his practice on a broad variety of corporate matters to support clients in the high technology...  |  Read More

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