TCWalker

Gee, I think anyone could get a SAS 70 for just about any accounting or data management function. As I recall, what's promised is a predictible outcome based upon the integrity of the controls, methodology and operational effectiveness. I'm fairly certain I've seen balance forward shops offering SAS 70 certs.

Aware? Perhaps in the context of NQDCP plan to 401(k) under the paired plan PLR submissions in the early '90s. As I recall, there was a suggested way to structure these, where the NQ plan would "pour in" NQ deferrals at the PYE of coincident deferral periods to top-out the HCE's 401(k) deferral to the nonD percentage limit. Pretty messy idea.

Yes, those Code Sections exist. IRC Section 414(s) deals with alternative definitions of compensation for qualified plan purposes. I think members of this forum are relunctant to reply to your post because the facts you outline suggest you should be receiving guidance from a competent advisor or legal counsel - not from a bulletin board. Obviously, this is an important matter for you and involves the application of complex tax rules. I encourage you to find qualified pension consultant or ERISA attorney who can perform the necessary fact finding and work the problem through with you - that's "the right direction". Best wishes.

I'll admit I don't understand the meaning of your last two questions. As to the first question, a properly made deferral of bonus compensation to a properly established nonqualified plan is not taxed as income to the deferring employee until constructively received, aside from FICA withholding.

There aren't forfeitures (in most cases) as there could be in qualiifed participant account plan subject to vesting. There is no "account" the participant-beneficiary is entitled to receive in a DCP. The haircut reduces the employer liability to pay the deferred compensation to that employee by 10%, or whatever the haircut percentage. If the liability is informally funded under a rabbi trust the trust document usually provides a return of excess funding to the employer once a participant liability is fully satisfied.

Well, exactly. I suspect executives aggressively participating in a DCP also are likely to represent the wage-earners with significant annual deductions "AMT preference items", thus the deferral itself will, generally, aggravate their AMT situation. I guess the bottom line is the AMT calculated liability is very unlikely to result in a sum income tax owed that negates the benefit of making the pre-tax deferral.

Anyone suggest a link, article considering the AMT implications when an executive elects to defer a significant percentage of current compensation? Thanks!