The American Benefits Council applauded the decision by the Internal Revenue Service to extend the deadline for tax code Section 409A, allowing plan sponsors more time to evaluate their nonqualified deferred compensation options. The deadline, formerly Dec. 31, 2007, has been extended by one year to Dec. 31, 2008.
“Employers will now have adequate time to prepare for the implementation of new rules governing nonqualified deferred compensation,” said James A. Klein, Council president. “If the earlier deadline had been allowed to stand, unavoidable errors and inconsistencies would have resulted in onerous and inappropriate penalties imposed on plan participants.”
The Council had long advocated for an extension of the 409A deadline in numerous meetings and communications with IRS and the U.S. Treasury Department. The Council helped organize group letters from the business community urging for more time “to analyze and comprehend the changes in the final regulations, make final design decisions and then communicate those decisions to employees.”
“We thank Treasury and IRS for their attention to this issue and for their appreciation of employers’ responsibility to provide appropriate and accurate compensation to their workers,” ABC said.