Deferred compensation plans must comply with new law by year end

By the end of this year, the IRS requires every "deferred compensation plan" to comply with Internal Revenue Code Section 409A.  What is a deferred compensation plan?  The definition covers a number of employment arrangements, such as severance agreements, stock options, and change-in-control agreements.  A recent article in the Portland Business Journal by Northwest Business Litigation Blog contributor John Walch addresses the treatment of severance agreements under Section 409A. See our earlier posts about the new law here, here, and here. 

Every employer we have worked with has had at least one deferred compensation arrangement that needed to be brought in line with Section 409A.  To avoid the year-end rush, employers should now review any existing agreements with employees, directors and consultants, and discuss those agreements with their benefits attorney.