December 20, 2004
BB 04—128

In this issue:

  • Treasury Department Releases Guidance on Nonqualified Deferred Compensation

Treasury Department Releases Guidance on Nonqualified Deferred Compensation

On December 17, the U.S. Treasury Department released guidance on the recently enacted deferred compensation provisions of the American Jobs Creation Act of 2004. This legislation created a new Internal Revenue Code section 409A for which today’s guidance provides definitional and transition rules.

The Council previously has urged the Treasury Department to make exceptions from the deferred compensation rules outlined in the law so that existing broad-based nonqualified deferred compensation plans such as severance pay plans and equity appreciation rights programs would not be disrupted. The Council also emphasized the importance of good faith standards of compliance during the transition period due to the onerous nature of the penalties for failure to comply with the new rules.

The Council held a Benefits Briefing conference call on December 20 to provide analysis and perspective on the guidance. On the call, we were joined by Treasury Department officials who provided analysis and perspective on the guidance. To purchase a CD recording of this call for $50, contact Jason Hammersla, Council Communications Associate, at (202) 289-6700.

For more information, contact Lynn Dudley, Council vice president and senior counsel, at (202) 289-6700.


The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.