Topic: Deferred Compensation and Executive Benefit Plans

Cash Management Considerations for ESOP Repurchase Obligations

Funding a plan with company stock can be a great finance and employee motivational tool. But eventually, the piper must be paid. Employees will eventually terminate employment and want a cash payout from the ESOP.

Focus on Compliance: Applying Non-Qualified Plan Deferral Elections to the Final Payroll Period for

Under Code Section 409A, an annual salary deferral election generally applies to all salary earned during the calendar year. If this concept were to apply to salary earned during the last payroll period of the year that crosses into the next year, human resources would need to  identify the salary earned on or before December 31 and the salary earned after December 31, apply the appropriate deferral elections to each portion, (iii) communicate the two components of deferred compensation to the plan’s record keeper in order to assign the appropriate payment schedule to each portion and then (iv) communicate the combined deferral amount to payroll for processing.

Non-Qualified Plan Distributions: State Income Tax Sourcing Rules

Are distributions from Non-Qualified Deferred Compensation Plans subject to state income "source" tax (i.e. can the state in which the income was earned impose its state income tax on the distributions from the plan, even though the recipient resides in a different state when reeicing the distribution)? The answer is "yes" unless the distribution meets one of two requirements.

Update: New Disability Claims Regulations

On January 5, 2018, the Department of Labor announced that the new disability claims procedure regulations will go into effect on April 1, 2018. As we previously shared, the Department had delayed the effective date of the new rules from January 1, 2018 to April 1, 2018, in order for it to consider comments and data submitted by interested parties regarding the impact the new rules would have on costs and, ultimately, on workers’ access to disability insurance coverage. 

New Tax Law Has Minimal Impact on Retirement Plans

On December 22, 2017, Public Law No. 115-97, the widely debated new tax legislation, was signed into law.  This law, which was originally called the Tax Cuts and Jobs Act (but that now has no official name due to procedural rules) had, at various stages of the legislative process, a great number of provisions that would have impacted retirement plans.  However, the following are the only provisions in the final version of the law that we anticipate will have an impact (direct or indirect) on retirement plans:

Plan Sponsor Webinar: An Inside Look At Current Practicies in Non-Qualified Deferred Compensation

Newport Group's Mike Shannon, Senior Vice President, presented a webinar on October 19 which highlighted key findings from Newport Group's survey of Fortune 1000 companies regarding their use of deferred compensation and executive benefit plans.

Advisor Webinar: An Inside Look At Current Practices in Non-Qualified Deferred Compensation

Newport Group’s Mike Shannon, Senior Vice President, presented a webinar on October 19 which highlighted key findings from Newport Group's survey of Fortune 1000 companies regarding their use of deferred compensation and executive benefit plans.

The 2017 Edition of Current Practices in Non-Qualified Deferred Compensation

Newport Group's 2017 edition of Current Practices in Non-Qualified Deferred Compensation summarizes important issues and trends in non-qualified benefit plans. It reflects data compiled from nearly 11% of Fortune 1000 companies about how they structure, administer, and assess the success of their non-qualified plans.

The Key Employee Six-Month Rule and its Application to Public Company Sponsors of NQDC Plans

Public companies sponsoring non-qualified deferred compensation plans are subject to a special rule that requires payments to certain employees (called "specified employees" in IRC 409A) to be delayed for six-months following a seperation from service. This summary is intended to assist sponsors in developing administrative procedures for compliance with this special rule.

Deferring Equity-Based Compensation

This whitepaper addresses the tax, ERISA, accounting and business considerations associated with deferring equity-based compensation.

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Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services. Fiduciary consulting services are provided through Newport Group Securities, Inc., an SEC-registered investment adviser and FINRA-registered broker-dealer, and InterServ, LLC, an SEC-registered investment adviser. Newport Group Securities, Inc. and InterServ, LLC are affiliates of Newport Group, Inc. All securities transactions are provided through Newport Group Securities, Inc., in its role as broker-dealer. All fiduciary consulting services are provided through the registered investment adviser. when offering variable insurance products, Newport Group Securities, Inc. acts solely in its capacity as a broker-dealer.
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