US Legal Forms
Deferred Compensation Agreement - Long Form

Deferred Compensation Plan For Non-employee Directors In Montgomery

Q: What is the deferred compensation plan in San Francisco?

The Deferred Compensation Plan is a voluntary IRS 457(b) Plan that allows participants to voluntarily defer receipt and taxation of a portion of their regular earnings until after they retire or separate from service.

Category:

Employment - Compensation

State:

Multi-State

County:

Montgomery

Control #:

US-00418BG

Format:

Instant download

Description

Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.

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FAQ

The Plan enables Non-Employee Directors to diversify their outstanding DSUs by choosing different investment alternatives upon which the future value of DSUs shall be based. The Plan does not allow Non-Employee Directors to change the time or form of payment with respect to DSUs.

Definition and Overview Section 409A delineates a comprehensive regime for the taxation and regulation of nonqualified deferred compensation. It encompasses employees, directors and third-party service providers affiliated with both private and public entities, along with certain tax-exempt organizations.

Risk of Forfeiture The possibility of forfeiture is one of the main risks of a deferred compensation plan, making it significantly less secure than a 401(k) plan.

Cons of Nonqualified Retirement Plans Strict distribution schedules. Lack of ERISA protections: If a company faces financial difficulties, the benefits promised under these plans could be at risk, potentially leaving employees without the retirement funds they expected.

The Deferred Compensation Plan is a voluntary IRS §457(b) Plan that allows participants to voluntarily defer receipt and taxation of a portion of their regular earnings until after they retire or separate from service.

The CalPERS 457 Plan is a voluntary deferred retirement savings plan that allows you to defer any amount, subject to annual limits, from your paycheck on a pre-tax and/or Roth after-tax basis.

What is the BART 457(b) Deferred Compensation Plan? You make contributions from each paycheck that are invested with the goal of generating even more savings for your retirement. You choose how your savings are invested.

Elective deferral limit The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $23,000 in 2024 ($22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and 2021; $19,000 in 2021).