Delete Selected Option into the Deferred Compensation Plan and eSign it in minutes

Aug 6th, 2022
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How to Delete Selected Option into the Deferred Compensation Plan

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welcome everyone to another in our continuing series of educational webcasts this will be a level 1 session for non-qualified deferred compensation plans it is intended as a basics class but there will lease the meet in the presentation and the presentation will be posted so you need not take detailed notes but I would emphasize there are a couple things in here that I learn my guest speaker today is Chris Fernandez from the principle group he is and kind enough to join us and give us a rundown on what he sees as the key basic concepts of non qualified plans Chris you want to go ahead and introduce yourself yeah absolutely thanks Scott and thanks everybody for joining us today Scott mentioned Im Chris Fernandez Im a senior consultant on non-qualified deferred comp plans with Principal Financial Group Ive been working in this capacity for the last 17 years my day-to-day function is working with financial advisors and their corporate clients to design and implement a non-qualified arr

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Participating in a deferred compensation plan can help a high income persons retirement situation immensely, allowing them to potentially retire much earlier than they otherwise could have. The contributions to the plan are tax-deductible each year.
Deferred compensation plans are perks provided by employers to their employees. They allow employees to elect a certain percentage or dollar amount of their compensation to be withheld for a certain purpose, such as retirement.
Planning retirement distributions For example, the Internal Revenue Code (IRC) allows for 401(k) withdrawals to begin penalty-free after age 59but the IRC also requires that you start taking distributions at age 73.
Is that allowed? NQP deferral elections typically must be made prior to when the income is earned, and are irrevocable once the earnings period has begun. In these cases, a participant can choose not to defer in future years, but cannot suspend deferrals during the current year.
Disadvantages of Deferred Compensation With a deferred compensation plan, you are effectively a creditor of the company, lending the company the salary you have deferred. If the company declares bankruptcy in the future, you can lose some or all of this money.
You have to decide how much income to defer prior to the beginning of the compensation performance period (usually 12 to 24 months before you receive it)and you generally cant change your mind midyear if your circumstances change.
If you have a qualified plan and have passed the vesting period, your deferred compensation is yours, even if you quit with no notice on very bad terms. If you have a non-qualified plan, you may have to forfeit all of your deferred compensation by quitting depending on your plans specific terms.
One potential exception is performance based compensation (PBC). If a deferral qualifies as PBC under Section 409A rules, deferral elections can be changed or cancelled as long as that change occurs with at least six months remaining in the performance period.

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