Corporate Securities Law Blog

Less than six months remain until the December 31, 2005 deadline for amending deferred compensation arrangements to comply with Section 409A of the Internal Revenue Code. These complex new rules were enacted for nonqualified deferred compensation arrangements in late 2004 and are effective for 2005, although IRS guidance so far has been limited. While awaiting additional guidance, expected later this year, you need to act now to ensure compliance. These new rules, including severe tax penalties for noncompliance, were summarized in our November 2004 Employee Benefits Update.