• Overview: Proposed Section 409A Regulations Provide Increased Flexibility For Nonqualified Deferred Compensation Plans
  • October 26, 2005
  • Law Firm: Pillsbury Winthrop Shaw Pittman LLP - Office
  • On September 29, 2005, the Internal Revenue Service (IRS) publicly issued its long-awaited proposed regulations under Section 409A of the Internal Revenue Code (Code). Section 409A, which was enacted as part of the American Jobs Creation Act of 2004, established new procedural and substantive requirements for nonqualified deferred compensation plans and arrangements. The proposed regulations incorporate most of the prior guidance provided in IRS Notice 2005-1, which was issued on December 20, 2004, but with certain clarifications and modifications in response to public comments. In addition, the proposed regulations provide initial guidance on several subjects that were not addressed in Notice 2005-1; including, for example, rules respecting initial deferral elections, time and form of payment and subsequent elections to change time and form of payment.