Members of the Senate Finance Committee say Congress probably will change the non-qualified deferred compensation plan provisions now in the Senate version of H.R. 2.
The non-qualified deferred comp provisions that the Senate Finance Committee added to the minimum wage bill turned out to be broader than senators had expected, Sen. Ron Wyden, D-Ore., a Democratic committee member of the Senate Finance Committee, said Wednesday on CNBC.
Senators now want to revise the provisions to target only top executives, Wyden said.
Sen. Charles Grassley, R-Iowa, and Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, “will work to get that done in conference,” Wyden said.
The Senate is preparing to vote on H.R. 2 later today.
The bill would increase the federal minimum wage to $7.25, from $5.15, over 2 years.
The non-qualified deferred comp provisions were supposed to affect the income of the most highly paid executives, but, because of the way they are written, they could have a much broader scope, according to David Stertzer, chief executive of the Association for Advanced Life Underwriting, Falls Church, Va.
The H.R. 2 non-qualified deferred comp provisions could “impair the ability of hundreds of thousands of mid and upper-level employees to save for retirement through nonqualified deferred compensation,” Stertzer says.
“Some people may view the proposal as a way to address a perception that CEOs and a few top officers make too much in total compensation, but, in fact, the proposal has little to do with top executive compensation–which includes salary, stock-based and other incentives, qualified retirement plans, and other elements,” Sterzer says.
Instead, “the proposal focuses on one element of compensation that is not in any way abusive,” Stertzer says.
Because the House version of H.R. 2 has no provision related to deferred compensation, the National Association of Insurance and Financial Advisors, Falls Church, Va., “is cautiously optimistic” that House and Senate leaders will find a way to eliminate the Senate deferred compensation language entirely,” says Michael Kerley, a senior vice president at NAIFA.