409A Mandates for Employee Severance Agreements

Unraveling the New Legal Complexities, Avoiding Severe Tax Penalties

Prepare Now for 1/1/09 Compliance With the Final 409A Regulations

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


Conducted on Wednesday, October 22, 2008

Program Materials

Description

The final regulations to IRS Section 409A, effective Jan. 1, 2009, impose sweeping changes on severance pay plans and severance agreements. A company's failure to comply can result in severe IRS penalties, including income tax assessments, interest and a 20% additional tax.

Listen as our panel of employee benefits attorneys explains the impact of 409A on severance pay plans and severance agreements. The panel members will discuss steps companies should take immediately in designing, drafting, and administering severance plans and agreements to ensure compliance.

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Outline

  1. 409A and deferred compensation, generally
    1. Events triggering deferred compensation distribution
    2. Six-months separation rule
    3. Elections to defer compensation
    4. Acceleration of the date of payment
    5. Penalties for noncompliance
  2. When is severance treated as deferred compensation subject to 409A?
    1. Good reason provisions
    2. Safe harbor
    3. Short-term deferral exception
    4. Separation Pay Plan Exception
  3. Strategies for compliance
    1. In general
    2. Pilot voluntary correction program
    3. Reimbursement requirements
    4. Releases

Benefits

The panel will review these and other key questions:

  • What ERISA and 409A issues must be considered in severance plans and agreements?
  • What are some best practices for complying with the new 409A regulations as they relate to severance plans and agreements?
  • What are the penalties for failing to comply with 409A?
  • What steps should companies take now to transition from the interim 409A rules to the final regulations?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Steven J. Friedman
Steven J. Friedman

Shareholder
Littler Mendelson

He chairs the firm's Employee Benefits Practice Group and has extensive experience analyzing issues related to 409A.

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Annita M. Riddick
Annita M. Riddick
Senior Counsel
Energy Future Holdings

She prepares executive arrangements, compensation programs and plan documents, resolutions and communications to...  |  Read More

Joseph Cartafalsa
Joseph Cartafalsa
Partner
Putney Twombly Hall & Hirson

He represents management in all aspects of labor and employment law and related litigation and represents employers on...  |  Read More

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