Don't Forget the Balance Sheet Deferrals

June 21, 2013

Whether your organization is large or small, non-qualified deferred compensation plans can be a growing concern for two key reasons. First, we have seen organizations surprised by the “magnitude” of these plans’ long term cost obligations. Have you projected the balance sheet liability over the next five – ten years for your non-qualified plans? It is not uncommon for mirror plan rates to cause undue balance sheet pressure. Second, many plans are not in compliance with applicable IRC regulations.  Are your non-qualified plan participants appropriately covered and sanctioned to be in the plans? Some plans are Board appointed by name, so successors are not automatically covered. Are compensation and interest crediting rates being appropriately handled? Are the plans appropriately filed with the DOL and are taxes imputed when applicable? Addressing these simple questions now can save much anguish down the road.

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