Regulatory Rules: Plan Design and Operation, Distribution Events Applied Knowledge
Resource Guides
Plan sponsor resource guide - Unforeseeable emergencies (NQ119)
A guide for plan sponsors having participants apply for unforeseeable emergency relief in nonqualified deferred compensation plans.
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Plan sponsor resource guide - Deferral timing rules (NQ135)
This guide is designed for plan sponsors of a deferred compensation plan that allows employee deferrals.
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For-Profit Entities
Plan Design and Operation
Daily valuation of NQ plan liabilities and corporate assets (BB10135)
Plans have evolved over the years to offer participants more flexibility. This looks at the factors behind the need for daily valuation.
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Deferred comp ERISA and top-hat eligibility (BB10894)
NQ deferred comp arrangements, sometimes called "top-hat" plans, are generally subject to the requirements of ERISA, but with significant exemptions.
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Documentary correction program (BB11168)
Outlines how the program provides methods to voluntarily correct certain nonqualified deferred comp plan document failures and omissions to comply with Section 409A.
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Deferred comp plan benefits and employer bankruptcy (BB12497)
Explains how an employer bankruptcy could impact a nonqualified deferred comp plan.
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Deferred comp plans and pass-through tax entities (BB10129)
Includes tax and cash flow issues for pass-through entity owners.
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Deferred comp 409A plan aggregation issues (BB10142)
Outlines the plan aggregation rules and key points to remember for employers offering nonqualified deferred comp plans subject to Section 409A.
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Performance-based compensation deferrals (BB10292)
Explains the rules for nonqualified deferred comp participant compensation deferral elections.
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Deferred comp deferral and distribution elections (BB10922)
Section 409A and subsequent guidance define and clarify permissible deferral and distribution elections for deferred comp plans.
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Year-end payroll 409A considerations (BB11606)
Details year-end payroll issues associated with nonqualified deferred comp plans. Includes year-end base salary payroll considerations and year-end payment of performance-based compensation considerations.
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Section 409A operational correction program (BB11174)
Methods to voluntarily correct certain inadvertent operational failures to comply with 409A requirements.
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Deferral timing requirements for rehired employees (BB12191)
Outlines specific timing rules for when rehired employees can defer income into a deferred comp plan.
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Subsequent deferral elections under IRC 409A (BB12221)
Section 409A allows participants to delay the distribution or change the form of the benefit of scheduled distributions as long as outlined rules are followed. This provides more details and examples around "re-deferrals".
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Distribution Events
Plan terminations under IRC 409A (BB12451)
There are three situations where a nonqualified deferred comp plan can be terminated under Internal Revenue Code Section 409A and the balance distributed to participants.
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Separations from service (BB12210)
Details separations from service and distributions from a deferred comp plan.
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Nonqualified plan distributions to key employees of public companies (BB11170)
Outlines how IRC Section 409A addresses concerns related to perceived abusive executive compensation practices in public companies.
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Transfer of deferred comp account balances in divorce income tax reporting (BB10131)
Transfers of nonqualified deferred comp accounts in Divorce Revenue Ruling 2002-22 and Notice 2002-31
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NQDC plan distribution events under Section 409A (BB11171)
Discusses permissible distribution events as defined by IRC Section 409A.
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Tax-Exempt Entities
Non-Governmental 457(b) Plans
Distribution elections in non-governmental 457(b) plans (BB12495)
Provides an overview of the distribution election options and timing for 457(b) plan participants.
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Nonqualified plans and the lifetime income stream (BB12496)
Explains why participants should view nonqualified deferred comp plans more as a tool to “bridge the gap” between separation from service and taking benefits from ERISA-protected plans, rather than as a lifetime income stream.
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457(b) required minimum distributions (BB11608)
Similar to qualified plans, participants in 457(b) plans are subject to required minimum distributions rules. The rules contain two components: a required start date and a minimum distribution amount.
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457(b) contribution limits and catch-up contributions (BB11298)
457(b) plan contribution limits and Special Section 457(b) catch-up contribution guidance.
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Vesting and employer contributions in 457(b) plans (BB11518)
Provides definitions of contribution limits, which include both participant deferrals and vested employer contributions. Also discusses the potential for unintended refunds or plan violations when vesting schedules are used for employer contributions.
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Tax-Exempt 457(f) Plans
Extending vesting for existing accounts in a non-governmental section 457(f) plan (BB12492)
Outlines how a 457(f) plan can extend the substantial risk of forfeiture for previously established accounts if certain conditions are met.
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Employee deferrals in a non-governmental IRC Section 457(f) plan (BB12493)
Highlights how and when employee deferrals into 457(f) plans can be allowed and under what conditions.
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Non-competition agreements in 457(f) plans used to delay substantial risk of forfeiture (BB12494)
Outlines how a non-compete agreement in 457(f) plans can be used to extend a participant’s risk of forfeiture beyond separation from service.
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Taxes on renumeration and excess parachute payments (BB12301)
The Tax Cuts and Jobs Act of 2017 swept some tax-exempt organizations into the world of penalties on "excess" compensation and parachute payments for the first time. Previously, tax-exempt organizations were not subject to tax-related limitations on the amount they could pay to key executives. With the advent of Code Section 4960, new rules started applying after 2017.
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Insurance products issued by Principal National Life Insurance Co. (except in NY), Principal Life Insurance Company®, and the companies available through the Preferred Product Network, Inc. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392. For financial professional use only. Not for public distribution.
2070166-032022