A Tribal Executive’s Guide: Deferred Per Capita Plans

Executive Overview

This article addresses a topic that has received increased attention from tribal members, financial service providers and tribal executives: How to offer tribal members the opportunity to elect on a year by year basis to place a portion of their per capita payments into a tax-deferred long-term saving vehicle. The tax benefits of these elective deferred income plans have been widely touted. This article calls attention to those benefits but also explores key structural issues for minimizing the risks of deferred income plans.

A-1. A deferred per capita plan is a plan sponsored by a Tribal government that permits its members to voluntarily invest a portion of their per capita distributions in a tax-deferred savings vehicle. It is very similar to a 401(k) plan sponsored by employers for their employees, but is easier to administer. However, since per capita payments are