Internal Revenue Code Sec. 409A
BGW's Platform Solution
By Robert Shor, CEO
Several years ago the President signed into law the American Jobs Creation Act (House-Senate package on FSC-ETI [H.R. 4520]) which contained new IRC. Sec. 409A. The Internal Revenue Service published their Final Regulations on April 10, 2007. As you may be aware, H.R. 4520 and the Final Regulations contain several provisions that will impact nonqualified deferred compensation plans (NQDCP).
How Will These Changes Impact You?
Changes in the laws and Regulations presented you with two options:
- Amend your existing plan to comply with the new law by December 31, 2007, or
- Freeze and grandfather your existing plan as of December 31, 2004, then establish a new plan to comply with the new law. If you elected to Freeze your plan, you have already done that.
- The Final Regulations include a few surprises. Now, how shall an employer amend its plan to conform to the Final Regulations? And, are their hidden opportunities in the Act? Contact us and we will provide our insights and a web demonstration of our solution.
For frozen plans, your participant account balances accumulated through the end of 2004 would be subject to the provisions of the Plan as it existed then (current participants at the time get the benefits they signed up for). Going forward, since 2005, account balances have been subject to the new laws.
BGW already has a solution. Our online online services and platform have been designed to handle changes such as these with minimal impact on our clients and participants. We have designed an intuitive solution that will reflect PRE 2005 deferrals and POST 2004 deferrals on the same website. In addition, our configurable system allows BGW to give your participants the flexibility you want them to have by offering either a pooled approach or a Class-Year Deferral and Distribution platform that is state of the art and time-tested.
contact us to discuss how we are now ready to meet the legislative
changes without disrupting your administration, or call toll free at
This white paper (last updated on November 16, 2004) contains references to concepts that have significant legal, accounting, and tax implications. Our comments are intended to convey our general understanding of applicable principles but are not intended as a legal opinion. We recommend you consult appropriate legal counsel and your accountant for specific advice.
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