It has been almost eight years since the enactment of
Section 409A, setting forth the complex rules governing the timing,
form and tax treatment of nonqualified deferred compensation
payments.
The final regulations under Section 409A were effective January
1, 2009, at which time non-grandfathered deferred compensation
plans had to be updated to comply with the rules. Operationally,
nonqualified deferred compensation plans have had to comply with
the published guidance since January 1, 2005.
Service recipients (for purposes of this article, service
recipient will be referred to as employer) that maintain
nonqualified deferred compensation arrangements may want to review
their documents and procedures for any Section 409A compliance
violations. IRS has provided voluntary compliance programs for
employers to use to correct document failures (Notice 2010-6,
2010-3 IRB 275) and operational failures (Notice 2008-113, 2008-51
IRB 1305). Corrections made pursuant to these
