The 2016 proposed regulations significantly expanded 457(f) plan sponsors’ ability to permit elective deferrals, use noncompetition agreements and make larger severance payments than otherwise permitted under 409A without immediate taxation to participants. In a recent presentation, Ruth Wimer, Mary Samsa and Joseph Urwitz discuss the surprising opportunities with respect to tax-exempt and governmental entities’ “ineligible nonqualified deferred compensation” arrangements in 2016 regulations. They also address the rules and limitations of the short-term deferral exception, the interaction of the 2016 regulations with existing regulations, other types of arrangements potentially affected, as well as best practices for employers.
Proposed 457(f) Regulations: Opportunities and Challenges
Posted In Employee Benefits, Executive Compensation
Tags: 457(f), bona fide interest requirements, Code Section 409A, Elective Deferral Feature, elective deferrals, forfeiture, IRS Notice 2007-62, Noncompetes, noncompetition agreements, plan sponsors, Potential Flexible Allowance Plans, PTO, retention bonus, Rolling Risks, Section 409A of the Internal Revenue Code, Separation pay arrangements, short-term deferral exception, Vacation Pay
McDermott Will & Emery
Joseph K. UrwitzJoseph (Joe) K. Urwitz focuses his practice on employee benefits, executive compensation and Employee Retirement Income Security Act (ERISA) fiduciary matters. He advises clients on a wide range of issues, including fiduciary duties and prohibited transactions, employee benefit matters arising in mergers and acquisitions, benefits issues unique to nonprofit entities, deferred compensation arrangements, equity award and bonus plan design, employment and severance arrangements, and qualified plan work. Read Joe Urwitz's full bio.
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