Nonqualified Deferred Compensation Plans

Reid and Riege helps its clients establish nonqualified deferred compensation plans to provide benefits to management or highly compensated employees in excess of the benefits that can be provided through qualified retirement plans.  These arrangements include employment agreements, bonus plans, supplemental retirement arrangements, excess benefit plans, deferred compensation plans, “golden parachute” agreements, separation agreements, change in control agreements, and equity incentive arrangements.  Special rules apply to nonqualified deferred compensation arrangements established for the management employees of a tax-exempt entity.  In addition, recently enacted rules governing the taxation of nonqualified deferred compensation arrangements (the so-called Section 409A rules) have a significant impact on the design of such arrangements.  The failure to satisfy these complex rules could have severe, adverse tax consequences for both the employee and the employer.

In a recent matter, we helped a tax-exempt client establish a nonqualified deferred compensation plan to provide additional compensation to its executive director.

For additional information, contact John V. Galiette (860) 240-1009, jgaliette@reidandriege.com, John J. Jacobson (860) 240-1006, jjacobson@reidandriege.com, or Ron J. Koniuta (860) 240-1034, rkoniuta@reidandriege.com.