Publications
Congress Passes Nonqualified Deferred Compensation Legislation
As of October 11, 2004, both houses of Congress have passed the American Jobs Creation Act (the “Act”). President Bush is expected to sign the Act into law shortly. The Act significantly changes the federal tax laws that apply to nonqualified deferred compensation arrangements and will require most employers to change their executive deferred compensation plans. Significant penalties apply for failures to comply with the Act’s provisions. Generally, the Act applies to amounts deferred after 2004, but employers sponsoring nonqualified arrangements will need to take action by December 31, 2004 to comply with the Act. This Employee Benefits Alert includes a summary of the key provisions of the Act, as well as a description of the actions that employers should take with respect to their nonqualified deferred compensation arrangements (“NQDC Plans”).