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 “Voluntary Audit Disclosures Equals Greater Transparency”
October 05, 2016

Voluntary Audit Disclosures Equals Greater Transparency

Executive Benefits News

Voluntary Audit Disclosures Continue to Grow In an article that looked at corporate audit disclosure practices, published by CFO Magazine, author Matthew Heller, cites an EY Report, stating, “… more companies are disclosing how they oversee and appoint external auditors and the reasons for changes in fees,” adding, “The percentage of companies that disclosed factors considered by the audit committee when assessing the qualifications and work quality of the external auditor increased by 50%, up from 42% in 2015.” EY’s Center for Board Matters reviewed the proxy statements of Fortune 100 companies, verifying that firms are exceeding the minimum disclosure. Among the findings disclosed by the EY report is: The audit committees of 82% of the companies explicitly stated that they are responsible for the appointment, compensation and oversight of the external auditor; in 2012, only 42% of audit committees provided such disclosures. You can read the full EY report here: Audit Committee Reporting to Shareholders in 2016. You will also want to read the full article that appeared on the CFO Magazine website. Voluntary Audit Disclosures Continue to Grow  The report noted that over the past year, the SEC has taken a series of actions to consider whether and how to improve
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Featured image for “Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much?”
September 28, 2016

Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much?

Executive Benefits News

Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much? On the surface, two plans may appear equal. Yet, when skillful executive benefits professionals analyze the plans, disparities become glaringly obvious. Cost to the company, reward to the executive, flexibility of benefits, and tax ramifications can vary drastically. Plan sponsors typically work diligently to decrease the costs of qualified retirement plans, healthcare plans, and other welfare benefit offerings. But do you or your company apply the same level of scrutiny to your executive benefits strategies? Do you know how your plans measure up to your peer company benchmarks? What would improving earnings per share do to your stock price? Are there pennies hidden in the design, cost, or efficiency of your executive benefit plans? The Power of Looking Behind the Curtain When a company maximizes the effectiveness of its nonqualified deferred compensation strategy, it improves continuity, reduces vulnerability to talent loss, and increases earnings. Executives are positioned to achieve their personal financial goals and a meaningful partnership is built between key talent and the plan sponsor. By choosing Fulcrum Partners to review your existing benefit plan, you incur zero cost for our services and we will not tie
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Featured image for “Taxes at the Optimal Time. Your Need for a Nonqualified Deferred Compensation Plan”
September 22, 2016

Taxes at the Optimal Time. Your Need for a Nonqualified Deferred Compensation Plan

Executive Benefits News

Taxes … at the Optimal Time YOUR NEED FOR A NONQUALIFIED DEFERRED COMPENSATION PLAN A nonqualified deferred compensation plan, NQDC, can provide you flexibility and control in planning when you receive compensation payouts. Income taxes on the payments received are not paid until the year you receive your money. By choosing to defer distributions while you are working (and your tax rate is potentially higher), you can schedule for distribution during your retirement, when your effective tax rate may be lower. You can coordinate your NQDC distributions with your social security distributions or other pre-tax retirement plans such as your 401(k) plan. You may be interested in funding your retirement with NQDC distributions first, and then receiving qualified plan distributions later. As an eligible executive with variable income components, you may use your NQDC plan to choose when you take distributions, including the option to take installments. Additionally, you have the flexibility to delay distributions beyond the originally scheduled timing. Learn how NQDC can help you build wealth now and for the future. Contact Fulcrum Partners.
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September 19, 2016

FINRA Regulation and the Cloud

Executive Benefits News

FINRA Regulation and the Cloud FINRA, the Financial Industry Regulatory Authority, deals with the storage of between 50 and 75 BILLION records of information daily. This video explains more about what data the Financial Industry Regulatory Authority stores in the cloud and why. As The Alert Investor, the Financial Industry Regulatory Authority online magazine, points out, “for FINRA, staying on the cutting edge means embracing the cloud.”   To learn more about the services provided to the public by the Financial Industry Regulatory Authority, contact: Industry Contacts Investor Contacts Arbitration & Mediation Locations & Contacts Securities Helpline for Seniors A toll-free number that senior investors can call to get assistance from Financial Industry Regulatory Authority or raise concerns about issues with brokerage accounts and investments. Learn more. Call 844-57-HELPS (844-574-3577) Monday – Friday 9 a.m. – 5 p.m. ET FINRA BrokerCheck To check the background of any of the Fulcrum Partners Investment Professionals, go to FINRA’s BrokerCheck. Enter the name of any of the Fulcrum Partners investment professionals to see employment history, certifications, and licenses.
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Featured image for “Recruit. Retain. Reward … Retire.”
September 15, 2016

Recruit. Retain. Reward … Retire.

Executive Benefits News

Recruit. Retain. Reward … Retire. NQDC plans can provide employers critical leverage to recruit, retain, reward through to retirement, the key talent that enables the organization to achieve its goals, maintain stability, and satisfy board members and stakeholders. Inspire/influence the behavior of key performers by customizing contribution and vesting schedules to use as performance rewards for executives. A company’s NQDC plans can be customized to serve many types of organization goals. Discretionary employer contributions can help fulfil the unique needs of an organization. Plan for your company’s future, using NQDC to create phantom shares and provide an ownership experience or to create opportunities for key executives to be potential future owners.” OWNERSHIP EXPERIENCE: Employers can customize contribution and vesting schedules measured by phantom stock values, making it possible for the executive to share both in increases and decreases in the valuation of the company, creating an ownership experience without any actual dilution of equity rights. INSIDER TRANSITION: A closely held corporation might fund an NQDC plan account for current executives who are considered to be possible future owners, setting an account to vest and distribute on a “change in control” of the company. This type of structure incentives and rewards key
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September 13, 2016

Deferred Comp: Tax Strategy

Executive Benefits News

Deferred Comp: Tax Strategy Some mostly welcome clarification on taxation of deferred comp George G. Jones JD, LL.M, and Mark A. Luscombe JD, LL.M, CPA, authored an article on tax code changes regarding issues of deferred comp. The article was published on the website  Jones is managing editor in CCH’s Washington office and  Luscombe is principal analyst, at Wolters Kluwer Tax & Accounting. In their article, Jones and Luscombe looked at the 409A proposed regulations and modifications,  observing that the new proposed regulations and changes to existing modifications not only provided some welcome clarifications  “… but the guidance issued generally comes down in favor of taxpayers in trying to avoid income inclusion from these situations.” To read their informative article in full, click on Tax Strategy. You may also be interested in a white paper published by Fulcrum Partners LLC that looks at the proposed 409A tax code modifications and new rules, as well as changes and new rules regarding tax code 457. To view this white paper, click here: Report from Fulcrum Partners 409A and 457 Updates Fulcrum Partners LLC. Related Updates from Fulcrum Partners on Deferred Comp and Issues of 409A How Will 409A or 457 Changes Affect Part-Year Compensation? Section 409A Tax Code
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September 08, 2016

Fulcrum Partners Executive Benefits Adds New Financial Consultant

Fulcrum Partners, a One Digital Company Media Releases

Fulcrum Partners Executive Benefits Adds New Financial Consultant Ponte Vedra Beach, FL (Sept 8, 2016) FOR IMMEDIATE RELEASE Fulcrum Partners LLC., (Fulcrum Partners executive benefits) continues its aggressive growth commitment, hiring Financial Consultant, Kenneth DePaola. DePaola joins Managing Director Tom Chisholm at the Fulcrum Partners Chicago office. Kenny DePaola comes to Fulcrum Partners from Northwestern Mutual, where he was honored with both the Agency Growth Award and the Bronze Award. He is a 2007 graduate of Ball State University in Muncie, Indiana, is licensed by the Illinois Department of Insurance and holds Series 6 and 63 FINRA licensing. Tom Chisholm observed, “Kenny exemplifies the type of exceptional young talent we are attracting and encouraging at Fulcrum Partners. The need for highly trained specialists who understand the subtleties and complexities of executive benefits issues has never been greater. The changing face of corporate America and the global economy leaves companies dealing with employee retention, key executive compensation, and the challenges that come with changes in control and plan integration during mergers and acquisitions.” Managing Director Steve Broadbent heads the Fulcrum Partners Atlanta office. Broadbent said, “We are a small, dedicated company. Yet, within our market, we are one of the largest
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Featured image for “Your Need for a Nonqualified Deferred Compensation Plan”
September 06, 2016

Your Need for a Nonqualified Deferred Compensation Plan

Executive Benefits News

YOUR NEED FOR A NONQUALIFIED DEFERRED COMPENSATION PLAN Bridging the Gap … A nonqualified deferred compensation plan, NQDC, can serve an important function in helping to fill the significant gap between the combined amount of your social security retirement benefits plus your qualified retirement benefits and the amount of retirement savings you will need in order to replace your current income. Qualified retirement plans, IRAs, and 403(b) plans have limits on contribution amounts. In contrast, NQDC has inherent flexibility and affords greater opportunities, including 401(k) “restoration” that can help you bridge the replacement income gap. Forty percent of highly-compensated executives admit they are concerned about the gap between their current income and their projected retirement income.” A Nonqualified Deferred Compensation Plan: Permits you to defer compensation in excess of qualified plan limits on a pre-tax basis. Has flexible distribution options that can allow more choices in tax planning, including permitting accessibility before you reach the age of 59½ years. Restores contributions limited by IRS restrictions on qualified retirement plans. Allows you to have an individualized investment strategy. Is not subject to contribution/ participation limits. Allows organizations to make discretionary contributions to enhance employee retention, including incentive-based contributions. Has simplified government disclosure
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Featured image for “More on How Section 409A Rules Impact Nonqualified Deferred Compensation Plans”
August 26, 2016

More on How Section 409A Rules Impact Nonqualified Deferred Compensation Plans

Human Resources

The following update was prepared by IslerDare PC and is shared here with their permission as Fulcrum Partners continues to provide education and insight on the changes and clarifications to Section 409A Rules and Section 457 Rules. You may download this report on the Resources Page (New Section 409A Rules Impact Nonqualified Deferred Compensation Plans) of the Fulcrum Partners website. You may also view or download the whitepaper by Fulcrum Partners, “Report from Fulcrum Partners 409A and 457 Updates” on the Resources page of this website. New Section 409A Rules Impact Nonqualified Deferred Compensation Plans (NQDC) Executive Summary On June 21, 2016, the Treasury Department and IRS proposed clarifying changes to final and proposed regulations under Section 409A of the Internal Revenue Code (“Section 409A”), which impact a wide range of nonqualified deferred compensation arrangements. Taxpayers may rely on the proposed rules immediately, as the final regulations are not expected to significantly differ from the proposed regulations. What You Should Do Review your existing nonqualified deferred compensation arrangements to determine whether any changes are needed in light of the new guidance. Work with your consultants and outside legal counsel to determine how the guidance may impact proposed compensation arrangements that are being considered for your organization.
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Featured image for “White Paper: 409A and 457 Updates That Will Impact Your Deferred Compensation”
August 16, 2016

White Paper: 409A and 457 Updates That Will Impact Your Deferred Compensation

Executive Benefits News

White Paper: 409A and 457 Updates That Will Impact Your Deferred Compensation IRS Proposed Changes Deferred Compensation Rules 2016 409A and 457 Updates The US Treasury Department and the Internal Revenue Service have issued proposed guidance and new regulations on deferred compensation arrangements under Sections 409A and 457 of the Internal Revenue Code. These actions were published June 22, 2016, in the Federal Register. Follow these links to read, in full, the proposed regulation clarifications and changes that apply to Section 409A and to Section 457. Since the June 22, 2016, Internal Revenue System announcement of the proposed rules and modifications, numerous articles have been published by reputable sources, offering opinions and interpretations regarding the changes and application of the changes. It is important to note that sources have not been in wholly consistent agreement in interpreting the new guidelines. The proposed regulations help define what is, and what is not, to be treated as payment of compensation for purposes of Section 409A. Other specific areas in which the new regulations provide helpful insight include, but are not limited to the following: The separation of service for employees that move to contractor status, with the specification that when an individual transitions from status
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