409A Correction

12/10/2010 / Mary L. Komornicka

Non-qualified deferred compensation plans have been subjected to the 409A regulations for several years. In early 2010 the IRS provided guidelines on how these plans could be corrected to meet these requirements, particularly in regard to failures in the plan documents. (Notice 2001-113 and 2010-6).

While these notices provided guidance for many deferred compensation plan problems, they did not address issues regarding situations relative to stock rights and to plans that were linked to other plans. Notice 2010-80 was issued in late November to address these issues, providing relief for both the employers and the employees if the provisions of the Notice are followed. Employers with these plans should consult with their Larkin Hoffman legal counsel regarding any impact on their deferred compensation plans.