Minimize risk in retirement plans

Article Abstract:

Legislation has largely decreased the qualified plan benefits available to management. Numerous laws enacted since 1974 have decreased benefits that may be paid from and contributions that may be made to highly-paid employees. As a result, managers often favor nonqualified plan schemes, such as deferred compensation plans, which do not enjoy preferential tax treatment and are subject to some degree of risk. Managers and employers need to learn more aboutsuch risks so that they can formulate strategies designed to minimize them.

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Communicating nonqualified plans to executives

Article Abstract:

The passage of the Omnibus Budget Reconciliation Act of 1993 has further limited the amount of benefits that can be given to highly paid executives in qualified plans. To compensate executives for benefits lost due to limitations in qualified plans, many companies have developed nonqualified benefit plans, which should also comply with certain reporting and disclosure requirements. Tips to communicate nonqualified benefit plans to executives are presented.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Pension & Benefit Regulation, Methods, Laws, regulations and rules, Compensation management, Pensions, Qualified benefit plans

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TAM identifies opportunities and pitfalls for KSOP operation

Article Abstract:

The Technical Advice Memorandum from the IRS has affirmed that an employee stock ownership plan with a salary-reduction provision (KSOP) is eligible for certain tax privileges when used as payment for an exempt loan. The IRS has however strictly specified that the exempt loan has to benefit the employee in order to qualify for tax privileges. The KSOP is a good opportunity for employees to acquire company stock before taxes are computed.

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