Nonqualified Pension Payments

[J Simmons]

ER has a nonqualified, top-hat DB plan for a former member of management who has retired. The payments are made out of the employer's general assets. It is merely a promise by the employer to pay X amount per month for the remainder of the retiree's life. The individual retired 12/31/2006, and payments began in 2007.

It would appear such should be reported on Form 1099-MISC, Box 7. Is this correct?

It also appears that such will not be considered earnings for purposes of reducing his Social Security Benefits (he's 63 years old). Is this correct?

[Steelerfan]

ER has a nonqualified, top-hat DB plan for a former member of management who has retired. The payments are made out of the employer's general assets. It is merely a promise by the employer to pay X amount per month for the remainder of the retiree's life. The individual retired 12/31/2006, and payments began in 2007.

It would appear such should be reported on Form 1099-MISC, Box 7. Is this correct?

It also appears that such will not be considered earnings for purposes of reducing his Social Security Benefits (he's 63 years old). Is this correct?

This is reported on a Form W-2 and is subject to FICA/FUTA. Retiring doesn't make distributions non wage payments.