Deferred Compensation News and Updates

Deferred Compensation News brings you the latest information and insights on 409A nonqualified deferred compensation; institutional COLI, BOLI, and ICOLI; tax-and cost-efficient non-COLI funding strategies; low-cost tax managed non-COLI asset/liability designs; executive benefits benchmarking; succession planning and timely issues of executive pay and benefits. 
Featured image for “Fulcrum Partners Publishes Report on Nonqualified Plan Financing”
August 12, 2021

Fulcrum Partners Publishes Report on Nonqualified Plan Financing

Reports & White Papers

Fulcrum Partners, a OneDigital Company, has published, “Nonqualified Plan Financing: One Size Does Not Fit All”. The report looks at strategies an organization may elect to use if it chooses to fund its nonqualified deferred compensation (NQDC) plan.
Read More
Featured image for “CFO Decision Making: Integrating Executive Benefits into Employee Engagement”
April 17, 2021

CFO Decision Making: Integrating Executive Benefits into Employee Engagement

Reports & White Papers

In a post-2020 landscape, what changes to the design and purpose of executive benefit plan design impact CFO decision making? A look at NQDC advantages and benefit success strategies.
Read More
Featured image for “Important Strategic Tax-Saving Solutions and the Impact of SECURE Act on NQDC Plan”
February 20, 2020

Important Strategic Tax-Saving Solutions and the Impact of SECURE Act on NQDC Plan

Reports & White Papers

In case you were enjoying the long President’s Day weekend and missed it, here’s the report Fulcrum Partners released last week: “Impact of the SECURE Act 2019 on NQDC Plans and Retirement Distribution Elections.” The white paper, by Bruce Brownell and the team at Fulcrum Partners, is available to view or download as a PDF. As the report explains, the SECURE Act of 2019, which was signed into law by President Trump last December, was a bipartisan initiative to update and expand aspects of defined contribution (DC) retirement plans, with the intention of making them more accessible to employees and at the same time, less complex for employers. Much has been written about how the SECURE Act effects 401(k) plans. The Fulcrum Partners report, however, looks instead at how the new law may impact nonqualified deferred compensation (NQDC) plans and retirement distribution elections. Plan Design Can Support Tax-Saving Strategies Tax Code Section 409A (implemented in 2005) requires that NQDC plan participants elect timing and form of their retirement payout. It does not, however, require that the payout be taken as a lump sum payment, even though many plans default to this timing. The Fulcrum Partners Report explores some of the
Read More
Featured image for “Retaining Employees that Are Key but Are Not Highly Compensated”
June 26, 2018

Retaining Employees that Are Key but Are Not Highly Compensated

Reports & White Papers

Companies in a variety of industries such as construction, auto dealerships, or manufacturing, for example, are finding that retaining and motivating key employees is essential for the company to remain both stable and competitive. In some cases, although the employees are key to the organization, they do not meet the top hat definition of, “a select group of management or highly compensated (workers).”  When this is the case, a nonqualified deferred compensation plan (NQDC) is not a viable option for retaining and rewarding these employees. In such situations, alternate plan designs can be utilized. Case Study: A full-service logistics company with 150 employees considered its workers as part of evaluating its value proposition. Among the employees, a group of twelve workers were identified as key to business operations. The company sought a way to better retain these valued workers. Within the group of twelve, three employees were highly compensated, but the remainder were not, which limited plan design choices. Using a Nonqualified Incentive Bonus Plan, the company was able to motivate and reward the select group with contributions based on revenue metrics and to retain them with a vesting schedule. Other features that added value to the plan were: Tax
Read More
Featured image for “Fulcrum Partners Releases White Paper on Pre-Tax Income Deferral”
April 19, 2018

Fulcrum Partners Releases White Paper on Pre-Tax Income Deferral

Reports & White Papers

Important Insights on Pre-Tax Income Deferral PONTE VEDRA BEACH, FL — (April 19, 2018) Five years have passed since the executive benefits advisors at Fulcrum Partners LLC released Advantages to Pre-Tax Deferral of Income in an Uncertain Tax Environment, an in-depth report on the effectiveness of deferring compensation until retirement for the purpose of accumulating wealth and reducing taxes. While much has changed in the U.S. tax code, and on the national and global political and economic fronts, uncertainties of the tax environment remain. Fulcrum Partners Managing Directors Steve Broadbent and Chris Nyland have revisited the topic and are publishing a revised study that reflects today’s economic and tax considerations. The company is making the report available to the public as a downloadable PDF. As Steve Broadbent, Fulcrum Partners Atlanta, explained, “It’s mid-April, and taxes and strategies to defer taxes are fresh in everyone’s mind right now. Many working Americans have wondered whether the practice of deferring compensation is still sound, in view of changes to the tax code and the economy. Fulcrum Partners felt it was important to provide our marketplace with insights to help tax payers evaluate the practice of deferred compensation as part of long-term financial planning.
Read More
Featured image for “Nonqualified Defined Contribution Plans”
April 12, 2018

Nonqualified Defined Contribution Plans

Reports & White Papers

Are you looking for a guide to providing unlimited tax deferred contributions for select employees? A nonqualified defined contribution plan can be a valuable tool in providing long-term cash accumulation benefits to select employees of a company. As report author, Monte Harrick explains: A defined contribution NQDC plan is an attractive alternative for companies looking for ways to attract and retain the employees who are leading and determining the future of the company.” Read the case study report: “Nonqualified Defined Contribution Plans:  Providing Unlimited, Tax Deferred Contributions for Select Employees,” to learn how  one employer put this strategy to work to benefit his team and his company’s future. More about Monte Harrick, Managing Director Fulcrum Partners Los Angeles: Before joining Fulcrum Partners LLC as a Managing Director, Monte Harrick was affiliated with a Los Angeles-based executive benefit advisory for more than nine years. As a Managing Director, he specialized in working with large corporations in attracting and retaining top talent, specifically as related to executive benefits. His responsibilities included analyzing and consulting with corporations on the design, funding, and administration of leading nonqualified benefit plans and welfare benefit plans. Monte Harrick is affiliated with Valmark Securities, Inc. Securities offered through Valmark Securities, Inc. Member
Read More
Featured image for “Long Term Incentive Plan Design Template Guidance”
March 27, 2018

Long Term Incentive Plan Design Template Guidance

Reports & White Papers

Five Primary Components to an Effective Long Term Incentive Plan  // LTIP (Private Company) This whitepaper report has been prepared by: Scott Cahill, CLU, Cofounder & Managing Director Fulcrum Partners LLC. Download the White Paper as a PDF:  LTIP . Long Term Incentive Plan Design I. Determine business drivers that trigger awards. For private companies, the measures that we have worked with include: A. Return on Equity: Once the annual pre-tax returns exceed a predetermined yield on shareholder equity (hurdle rate), then there is a sharing of some portion of this “excess” yield. Typical hurdle rates are in the 12 to 18% range – depending on the capital requirements of the business. B. PTI / EBITDA / EBIT: (Pre-tax income/ Earnings before interest, taxes, depreciation, and amortization/ Earnings before interest and taxes) Whatever we call it, the measurement is determined by how much profit is earned. The hurdle is always set in advance and typically is a fixed target or percentage increase year over year. C. Company Performance vs. Outside Index: Under this system, an outside index is selected as the measurement to determine success of company performance.  The index can be as narrowly defined as the company wants, such as
Read More
Featured image for “IRC Section 162(m) Will Change with Proposed Tax Law Revisions, Impacting Aspects of Executive Compensation”
December 18, 2017

IRC Section 162(m) Will Change with Proposed Tax Law Revisions, Impacting Aspects of Executive Compensation

Reports & White Papers

Fulcrum Partners shares insights on the proposed tax reform, specifically related to IRC Section 162(m), with our clients and colleagues. PDF DOWNLOAD: FULCRUM PARTNERS IRC Section 162(m) Internal Revenue Code Section 162(m) [IRC  §162(m)] addresses federal tax code regulations “relating to the deduction limitation for certain employee remuneration in excess of $1,000,000 under the Internal Revenue Code. These regulations affect publicly held corporations.” After the U.S. House and Senate respectively approved separate tax reform bills, the conference committee went to work, reconciling, compromising, and in some cases discarding aspects of the proposed tax code revisions. As we have already witnessed, the projected tax changes have, thus far, taken a few twists and turns with regard to executive compensation. (See Your Retirement is Not Yet Safe from Tax Reform and Tax Reform is Still Putting Your Retirement at Risk). The following update provides insights on select aspects of executive compensation as potentially impacted by the proposed tax changes. Where IRC Section 162(m) Tax Code Reform Currently Stands As of the writing of this article, the tax reform plan contains three significant changes that were contained in both the Senate and the House version of the tax bills: Both versions remove the performance-based
Read More
Featured image for “Non-Qualified Deferral Plans: Not Just for Large Companies”
December 05, 2017

Non-Qualified Deferral Plans: Not Just for Large Companies

Reports & White Papers

How Small Companies Can Use Non-Qualified Deferral Plans to Attract and Retain Talent “Can smaller companies take advantage of an NQDC plan to help them reward and recruit key employees? The answer is Yes!” Smaller organizations have many of the same challenges large companies have in attracting and retaining management talent. Even S-Corporations and LLCs, which have traditionally overlooked these types of programs are seeing the advantages of implementing them within their organizations. The simplicity of implementation, ease of administration, and manageable cost attract smaller companies to NQDC plans. Other appealing plan features include: The flexibility to randomly select which highly compensated employees will participate The lack of 5500 filing or other cumbersome legal filing requirement The capacity to implement a plan without significant cost Non-Qualified Deferral Plans: Not Just for Large Companies Read the whitepaper by Fulcrum Partners Managing Director Monte Harrick to learn more. Click to download or view as a PDF.   More about Monte Harrick, Fulcrum Partners Los Angeles: Expertise Consulting with large and small corporations in helping their key employees delay the taxation on compensation for as long as possible. Accomplishing this objective by assisting these companies in designing creative pre-tax and after-tax savings strategies that fit the culture and goals of the
Read More
Featured image for “Avoiding 5 Common Mistakes in Life Insurance Planning”
June 21, 2017

Avoiding 5 Common Mistakes in Life Insurance Planning

Reports & White Papers

Executive benefits consulting firm, Fulcrum Partners LLC, is pleased to distribute this AALU WashingtonMarketplace Report, “Trouble Ahead, Trouble Behind,” and You Know that Notion Never Crossed My Mind: Avoiding 5 Common Mistakes in Life Insurance Planning,” to its clients and friends. This continuing series of articles is intended to provide in-depth insight into trends, events, and issues that impact the design and operation of nonqualified executive benefit plans. Fulcrum Partners is an independent member of the BDO Alliance USA. The WRMarketplace is created exclusively for AALU members by experts at Greenberg Traurig and the AALU staff, led by Jonathan M. Forster, Steven B. Lapidus, Martin Kalb, Richard A. Sirus, and Rebecca Manicone. WRMarketplace #17-24 was written by Greenberg Traurig Shareholder Jonathan M. Forster. The AALU WRNewswire and WRMarketplace are published by the Association for Advanced Life Underwriting® as part of the Essential Wisdom Series, the trusted source of actionable technical and marketplace knowledge for AALU members—the nation’s most advanced life insurance professionals.  TOPIC: “Trouble Ahead, Trouble Behind,” and You Know that Notion Never Crossed My Mind: Avoiding 5 Common Mistakes in Life Insurance Planning. MARKET TREND: As estate planning involving personal life insurance becomes commoditized, so does the chance that
Read More