Topic: Deferred Compensation and Executive Benefit Plans

Actuarial Services for Cash Balance Plans

As a type of defined benefit pension plan, cash balance plans can help employers attract and retain employees through enhanced benefit security, and maximize annual tax-allowable contributions to “qualified” deferred compensation arrangements through current (versus future) tax deductions.

Rabbi Trusts

Employers that sponsor non-qualified deferred compensation plans may choose to set aside funds in order to create a pool of assets that can be used to pay benefits that have been promised to executives.

Deep Dive into Executive Compensation: A Case Study

Newport Group helped a large conglomerate see the “big picture” of its executive compensation structure and provided a vision for long term improvements. 

The Importance of Fiduciary Governance Advice for Non-Qualified Savings Plans

Non-qualified plans are an excellent tool to help retain, attract and reward executives or highly compensated employees. These plans can provide participants additional tax-deferred benefits above the levels available in their 401(k) plan.

Terminating and Liquidating a Non-Qualified Deferred Compensation Plan

Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") requires deferred compensation to be paid under written agreements specifying both the time when payments commence and the form of payment. Section 409A prohibits earlier payment under an "anti-acceleration" rule. 

Adding Non-Qualified Plans to Your Business

Non-qualified deferred compensation plans are more popular now than ever among the nation’s leading companies due to their relative ease of implementation and high individual tax rates (federal and state).

Focus on Compliance: Mid-Year Enrollments

Internal Revenue Code Section 409A (“IRC 409A”) permits employees who first become eligible to participate in a non-qualified plan during the middle of the year to enroll within 30 days of initial eligibility. This rule may be beneficial to employees who are first hired in – or promoted to an eligible position during the middle of a tax year. However, care must be taken to ensure the rule is properly applied.

Financial Accounting Treatment of Non-Qualified Deferred Compensation Plans

Under generally accepted accounting principles (“GAAP”), the assets and liabilities associated with a Non-Qualified Deferred Compensation arrangement are accounted for and reported independently. This memorandum discusses the general accounting treatment for both.

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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.
Trust and custody services provided by Newport Trust Company, a New Hampshire state chartered trust company and wholly owned subsidiary of Newport Group, Inc.