Benefits Notes |

Employee benefits are an important part of every employees' total compensation package. The continuously evolving landscape in the areas of health care reform, retirement plan design, and executive compensation makes it difficult for employee benefits professionals to keep up with relevant developments. The employee benefits attorneys at Stinson Leonard Street provide human resources professionals, plan fiduciaries, actuaries, accountants, and others in the industry with practical and cost-effective assistance as they navigate through the complex laws, regulations and guidance that govern employee benefits plans. This blog highlights key developments in the employee benefits field and items of interest to our clients. Our Bloggers →

Latest Deferred Compensation and 409A Posts

All Businesses, even if not Subject to 162(m), Should Consider Gathering Data to Support Future Deduction of Deferred Compensation under the Grandfather Rule

By Audrey Fenske | August 28, 2018

Compensation Questions, Deferred Compensation and 409A, Executive Compensation As mentioned in a previous blog, the IRS has issued its initial guidance on Code Section 162(m), as modified by the Tax Cuts and Jobs Act.  One important aspect of the guidance is its discussion of preserving deductibility under the transition rule, also known as the 162(m) "grandfather" rule. Under the grandfather...

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IRS Guidance Provides Some Clarity, but Leaves Questions Unanswered under 162(m)

By Audrey Fenske | August 22, 2018

Compensation Questions, Deferred Compensation and 409A, Executive Compensation On August 21, 2018, the IRS issued its initial guidance on the amendments to Section 162(m) made by the Tax Cuts and Jobs Act, in the form of Notice 2018-68.  The guidance is fairly limited and does not completely address some of the questions it takes on. Notably, the guidance on what compensation will not be...

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FICA Lawsuit Settles For Over $3 Million

By Angela Bohmann | February 11, 2016

Deferred Compensation and 409A, Payroll I have previously blogged (here and here) about a lawsuit brought by participants in a nonqualified deferred compensation plan where the employer failed to report and pay FICA (social security) taxes in the most tax advantageous way. The employer had tried to get the lawsuit dismissed on the grounds that the FICA tax...

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Participants in Top Hat Plans Must Exhaust Administrative Remedies

By Angela Bohmann | September 29, 2015

Deferred Compensation and 409A, ERISA and Other Benefits Litigation, Executive Compensation So-called "Top Hat" plans are nonqualified deferred compensation plans for a select group of management or highly compensated employees. These executive compensation arrangements are exempt from many ERISA provisions, but are not exempt from ERISA's claims procedure requirements. Therefore, top hat plans must provide...

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Are Top Hat Plans Entitled to a Discretionary Standard of Review?

By Angela Bohmann | May 22, 2015

Deferred Compensation and 409A, Executive Compensation Many years ago the Supreme Court decided that qualified retirement plans that gave their fiduciaries discretion to determine plan benefits were entitled to have their decisions, reviewed by a court under a generous “abuse of discretion” standard. Although that standard may be limited in situations in which the...

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Employers Can Be Responsible for FICA Withholding Errors

By Angela Bohmann | January 13, 2015

Deferred Compensation and 409A, Payroll Back in 2013 I blogged about a class action lawsuit brought against Henkel Corporation for improper Social Security (FICA) tax withholding from nonqualified deferred compensation benefits. I am blogging now on an update to that case. To understand that case we need to review the taxation of nonqualified deferred...

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It is Always Good to Follow the Plan’s Claims Procedure in Denying a Claim – Part 2

By Angela Bohmann | June 9, 2014

Deferred Compensation and 409A, ERISA and Other Benefits Litigation Some months ago I blogged about an Eighth Circuit Court of Appeals decision involving high ranking executives participating in a company’s long term incentive plan where the executives won their suit under the plan, at least in part, because the employer had not properly followed the plan’s claims procedure. By...

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New Internal Revenue Service Regulation Clarify when Property is Subject to a Substantial Risk of Forfeiture

By Sam Butler | February 28, 2014

Deferred Compensation and 409A On February 26, 2014, the Internal Revenue Service published a final regulation clarifying the meaning of "substantial risk of forfeiture" under section 83 of the Internal Revenue Code.  The new guidance will help taxpayers who receive property, other than money, in exchange for services determine when they must...

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When is a LLC Profits Interest not a Profits Interest? U.S. Tax Court: “When it is a Capital Interest”*

By Jeffrey Cairns | February 6, 2014

Compensation Questions, Deferred Compensation and 409A, ERISA and Other Benefits Litigation, Executive Compensation, Uncategorized On December 2, 2013, the United States Tax Court issued its opinion in Crescent Holdings, LLC et al vs. Commissioner, 141 T.C. No. 15 (12/2/13) wherein it examined the tax rules applicable to transfers of partnership interests as compensation. Crescent Holdings, LLC (“Holdings”) was a limited liability company...

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