Description
The IRS pursues Section 409A audit initiatives to determine companies' compliance with 409A's restrictions on the deferral of compensation. The agency focuses on compliance with initial deferral election requirements, subsequent deferral election requirements, and distributions of deferred compensation, including the six-month delay rule.
Most severance arrangements fit within the purview of Section 409A and must be structured appropriately to avoid the adverse consequences imposed by Section 409A.
Specifically, failure to comply with 409A's strict rules can result in severe penalties, including a 20 percent excise tax and immediate taxes on vested deferred amounts. The IRS has ruled that an executive was required to recognize income under 409A--subject to the 20 percent penalty--because a plan document error was corrected in the vesting year even though it was before vesting occurred.
Listen as our experienced panel of employee benefits attorneys explains the critical requirements of 409A and discusses the steps companies should take to ensure compliance. The panel will outline best practices for reviewing nonqualified deferred compensation plans, employment agreements, and other severance arrangements.
Presented By
Mr. Bergmann counsels clients on employee benefits, ERISA and executive compensation matters. A significant portion of his practice is devoted to advising major public companies on employee benefit and executive compensation arrangements in the context of M&As as well as on an ongoing advisory basis. He also has extensive experience with the SEC rules governing executive compensation disclosure and the tax rules imposing limits on the deductibility of executive compensation.
Mr. Fosse focuses on all the tax, securities, corporate and accounting issues related to executive and equity compensation arrangements. He works with publicly traded, private, non-profit and government clients in the design, implementation and operation of domestic and international executive nonqualified and supplemental deferred compensation plans, as well as equity-based and other long-term incentive compensation arrangements. He regularly advises clients regarding handling employee benefit matters in corporate mergers, acquisitions, divestitures, initial public offerings and other corporate transactions.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, August 5, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
- 409A issues to be considered in severance plans and agreements
- Severance benefits subject to 409A
- Severance benefits exempt from 409A
- Impact of accelerating the vesting of equity awards upon the termination of employment on 409A
- Discussion of change in control severance arrangements and "regular" severance for purposes of 409A
- Importance of the definition of "good reason" for 409A purposes
- Can severance benefits that are subject to 409A be conditioned on a release?
The panel will review these and other key issues:
- Does 409A impact all severance plans and agreements?
- How does 409A impact the drafting of severance plans and agreements?
- What are some best practices for complying with 409A regulations as they relate to severance plans and agreements?
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