The Association for Advanced Life Underwriting is lobbying against the non-qualified deferred compensation provisions that were added Wednesday to the Senate Finance Committee’s version of the minimum wage increase bill.
The AALU, Falls Church, Va., “is concerned about these provisions and is communicating its concern to Congress,” says Tom Korb, vice president for public and policy affairs. “We have also helped call attention to these issues among a variety of pension-sensitive stakeholders in Washington.
Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, has opposed mixing tax provisions with efforts to increase the minimum wage, but members of the Senate Finance Committee have been trying to add tax breaks to their minimum wage bill
Senate panel members added the non-qualified deferred comp provisions and other provisions in an effort to offset the new tax breaks, observers say.
Senate Finance Committee members approved their version of the minimum wage bill, which at press time did not yet have a bill number, by a voice vote, after little debate.
One of the new non-qualified deferred comp provisions would restrict the amount of compensation that executives can defer each year, Korb says.
“While a few individuals would be permitted to defer as much as $1 million, the new rules would limit deferrals to far less than that for the vast bulk of individuals,” Korb says.
The provision capping deferred compensation at $1 million is “administratively cumbersome,” and technical violations could result in the immediate taxation of amounts that were legitimately deferred in past years, Korb says.