MetLife Deferred Comp Product from Late '90s

[Christine Roberts]

Has anyone encountered an extant "Maximum Deferred Compensation" or "MDC" program sponsored and sold by MetLife circa 1995 - ??

It appears to have capitalized on PLR 981005 which arose out of a deferred compensation arrangement structured between nonprofit Kaiser HMO, and a for-profit MD corporation (Permanente).

Specifically, Kaiser deferred fees for medical services it would otherwise have paid to the MD corp. into a grantor trust, assets of which were ultimately used to satisfy the MD corp's obligations under its own nonqualified deferred compensation plan. The Service ruled that Kaiser was the owner of trust assets for which there was a substantial risk of forfeiture, and the MD corp. would not be taxed on assets until the substantial risk of forfeiture lapsed (i.e,. when individual MDs reached age/service requirements for payout) and benefits were distributed. The Service also ruled that the arrangement would not give rise to any income to the participants and beneficiaries of the MD corp.'s deferred comp arrangement prior to actual receipt of funds.

[GBurns]

Can you check that PLR#, there seems to be a digit missing.

I am curious to see how Kaiser can have a deferred comp agreement with an unrelated corporate entity to defer something that is not wages or compensation earnings and which are being paid to someone who has no employment arrangement.

I would think that if any company was free to have its debtor clients defer its invoices, many would be taking advantage of this (if it was advantageous in their particular case).

[Christine Roberts]

Can you check that PLR#, there seems to be a digit missing.

I am curious to see how Kaiser can have a deferred comp agreement with an unrelated corporate entity to defer something that is not wages or compensation earnings and which are being paid to someone who has no employment arrangement.

I would think that if any company was free to have its debtor clients defer its invoices, many would be taking advantage of this (if it was advantageous in their particular case).

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