Unfunded NonQualified Retirement Plans
- § 9.01 Overview of Taxation of Plan Participants
- —–[1] Taxation of Plan Payments
- —–[2] Payments Under Certain Government and Tax-Exempt Organization Plans
- —–[3] The Use of “Rabbi Trusts.”
- —–[4] Harsh Treatment of Certain Premature or Delayed Payments
- —–[5] Deferred Payments Limited to Specified Dates or Events
- —–[6] Exceptions Allowing Accelerations of Payments
- —–[7] Elections to Further Delay Payments
- —–[8] Harsh Treatment of Certain Conditional Funding of Deferrals
- —–[9] Golden Parachute Payments
- § 9.02 General Attributes of Unfunded Nonqualified Plans
- —–[1] Unfunded Nonqualified Plans Described
- —–[2] Taxation of Payments Received Under Unfunded Nonqualified Plans
- —–[3] Third Party Guarantees of Deferred Compensation
- —–[4] Conditionally Funded Nonqualified Plans (Rabbi Trusts)
- —–[5] Grants of Stock Options or Stock Appreciation Rights to Employees
- —–[6] Payments Under Plans of State or Local Governments and Tax-Exempt Entities
- —–[7] State Community Property Laws
- § 9.03 Date Payments May Begin Under Section 409A
- —–[1] Section 409A in General
- —–[2] Substantial Risk of Forfeiture
- ———-[a] Substantial Risk of Forfeiture Generally
- ———-[b] Participant Who Is an Owner
- —–[3] Deferred Compensation and Exclusions
- ———-[a] Deferred Compensation Defined
- ———-[b] Regular Payroll Payments
- ———-[c] Short-Term Deferrals
- ———-[d] Indemnification and Liability Insurance
- ———-[e] Certain Legal Settlements
- ———-[f] Separation Pay Plans
- —————[i] Exceptions for Compensation Conditioned on Separation from Service
- —————[ii] Separation Pay as a Short-Term Deferral
- ———-[g] Excluded Stock Rights
- —————[i] When Stock Rights Are Exluded from Definition of Deferred Compensation
- —————[ii] Exclusion of Nonstatutory Stock Options
- —————[iii] Exclusion of Stock Appreciation Rights
- —————[iv] Common Stock and Other Equity Interests
- —————[v] Modifications and Extensions
- —————[vi] Rights to Dividends
- —————[vii] Stock Rights Qualifying as Short-Term Deferrals
- —————[viii] Failure to Satisfy the Exclusion
- ———-[h] Restricted Property, Including Trust or Annuity Plans
- ———-[i] Recurring Part-Year Compensation
- ———-[j] Application of 409A to Independent Contractors
- —————[i] Identification of Affected Independent Contractors
- —————[ii] Separation from Service for an Independent Contractor Under 409A
- ———-[k] Deferred Compensation Plan Defined
- —–[4] Initial Deferral Elections
- —–[5] Payment Dates or Events
- ———-[a] Payment of Deferred Compensation on Specified Dates or Events
- ———-[b] Specific Time or Fixed Schedule
- ———-[c] The Retiree’s Separation from Service
- ———-[d] The Retiree’s Death
- ———-[e] An Unforeseeable Emergency
- ———-[f] The Retiree’s Disability
- ———-[g] A Change in Employer Control
- ———-[h] Alternative Permissible Dates or Events
- ———-[i] Disputes and Refusals to Pay
- ———-[j] Earnings on Deferred Compensation
- —–[6] Payment Dates and Allowable Deviations
- ———-[a] Allowable Times and Forms of Payment
- ———-[b] Allowable Deviations from Plan Payment Dates
- ———-[c] Other Permitted Delays of Payments
- ———-[d] Changes in Time or Form of Payment
- ———-[e] Subsequent Deferral Elections Involving Life Annuities
- —————[i] Election Conditions and Allowable Non-Complying Changes
- —————[ii] 409A Definition of Life Annuity
- ———-[f] Subsequent Deferral Elections Involving Installment Payments
- ———-[g] Elections Affecting Short-Term Deferrals
- ———-[h] Domestic Relations Orders
- ———-[i] Multiple Payment Dates or Events
- ———-[j] Subsequent Deferral Elections by Beneficiaries
- —–[7] Accelerations of Payments
- ———-[a] Accelerations of Payments Generally Not Allowed
- ———-[b] Exceptions Allowing Acceleration of Payments
- —————[i] Domestic Relations Orders
- —————[ii] Conflicts of Interest
- —————[iii] Section 457 Plans
- —————[iv] Limited Cashouts
- —————[v] Plan Termination: Corporate Liquidation
- —————[vi] Plan Termination: Change in Control
- —————[vii] Other Plan Terminations
- —————[viii] Social Security Tax Withholding
- —————[ix] Offsets of Participant Liability to Employer
- —————[x] Bona Fide Disputes with the Employer
- —————[xi] Linkage to a Qualified Retirement Plan
- —————[xii] TARP Executive Compensation Revisions
- —–[8] Multiple Elections or Payment Events
- ———-[a] Elections Generally Apply Separately to Each Payment Event
- ———-[b] The Favored Payment Events
- ———-[c] Successive Deferral Elections
- —–[9] Some Typical Retirement Situations
- —-[10] Effective Dates and Related Planning
- ———-[a] Planning Opportunities Before 2009
- ———-[b] Stock Rights Relief Before 2009
- ———-[c] Deferrals Before 2005
- —–[11] Taxes, Penalties, and Interest upon Failure to Conform to 409A
- —–[12] Some Relief for Failures to Conform to 409A
- § 9.04 Unfunded Nonqualified Plans of State Governments and Tax-Exempt Organizations
- —–[1] Rules for 457(f) Plans of State and Tax-Exempt Organizations Plans Are in Transition
- —–[2] 457(f) Plans of State and Tax-Exempt Organizations Under Existing Regulations
- —–[3] 457(f) Plans of States and Tax-Exempt Organizations Under Proposed Regulations
- ———-[a] Taxation of Deferred Compensation from States and Tax-Exempt Organizations
- ———-[b] Exclusions from Treatment as Deferred Compensation Under Section 457(f) Plans
- —————[i] Exclusions from 457(f) Generally
- —————[ii] Discretion to Reduce or Eliminate Compensation
- —————[iii] Exclusion of Short-Term Deferrals
- —————[iv] Exclusion of Recurring Part-Year Compensation
- —————[v] Exclusion of Bona Fide Severance Pay Plans
- —————[vi] Exclusion of Window Retirement Programs
- —————[vii] Exclusion of Other Plans and Payments
- ———-[c] Substantial Risk of Forfeiture
- —————[i] When Deferred Compensation is Subject to a Substantial Risk of Forfeiture
- ——————–[A] The Future Performance of Substantial Services
- ——————–[B] Condition Related to the Purpose of the Compensation
- ——————–[C] Involuntary Severance from Employment Without Cause
- ——————–[D] Forfeiture on Violation of a Covenant Not to Compete
- —————[ii] Deferrals of Regular Compensation and Extensions of Deferrals
- ———-[d] Application of Code Section 409A to a Section 457(f) Plan
- —————[i] Harsh Consequences of Failure to Comply with Section 409A
- —————[ii] Section 409A Payment Events and Deferral Elections
- —————[iii] Accelerations of Payments under Sections 457(f) and 409A
- —————[iv] Short-Term Deferrals under Sections 457(f) and 409A
- ——————–[A] Short-Term Deferrals Generally
- ——————–[B] More Problematical Short-Term Deferrals
- ——————–[C] Extending a Risk of Forfeiture for a Short-Term Deferral
- —————[v] The Consequences of Violating 409A Can Be Both Onerous and Complex
- —–[4] Transition from a Taxable Entity to an Exempt Entity
- § 9.05 Treatment of Certain Restricted Assets and Transfers Offshore
- § 9.06 Deferred Compensation Payable by Foreign Entities
- § 9.07 Golden Parachute Payments
- § 9.08 Tax Withholding from Plan Payments
- § 9.09 Tax on Net Investment Income Not Applicable
- § 9.10 Estate or Gift Tax Imposed on Plan Benefits