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In providing deferred compensation to its executives, most employers inevitably adopt a 3-layered approach based on hierarchy: 1. Qualified plans fall under Section 401 of the tax code. With the exception of Section 401(k) plans, qualified plans may be established by both taxable and tax-exempt empl...

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Bibliographic Details
Published inAssociation management Vol. 45; no. 8; p. 93
Main Author Mason, Kenneth A
Format Journal Article
LanguageEnglish
Published Washington American Society of Association Executives 01.08.1993
Subjects
Associations
Deferred compensation
Employees
Employers
Executive compensation
Executives
Internal Revenue Code
Section 401
Section 401(k)
Section 457(b)
Section 457(f)
Section 501(c)
Tax exemptions
Tax regulations
US
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Summary:In providing deferred compensation to its executives, most employers inevitably adopt a 3-layered approach based on hierarchy: 1. Qualified plans fall under Section 401 of the tax code. With the exception of Section 401(k) plans, qualified plans may be established by both taxable and tax-exempt employers. The advantage of qualified plans is that they permit participants to defer the inclusion of plan benefits in their taxable income until the time of distribution. 2. Tax-deferred annuities are available to public schools and Section 501(c)(3) organizations. Described in Section 403(b) of the tax code, tax-deferred annuities permit employees of these organizations to make pretax contributions toward the purchase of retirement annuities. 3. Top-hat plans must be provided solely to a select group of management or other highly compensated employees. The price for this favorable tax treatment is a requirement that the executives' deferrals remain subject to the claims of the association's general creditors in the event the association becomes insolvent.
ISSN:0004-5578