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Employment lawyers have been inundated in the last few weeks with calls from clients asking how and whether the new American Jobs Creation Act affects various severance pay plans and other deferred compensation plans. If you are still recovering from the recent presidential election, or are preoccupied by the pending elections in Iraq, this one may have slipped by you. The smart thing to do would be to consult your benefits partner, as I did. In this article, I explain this new law in layman's terms and help you respond to those callers clamoring for information about this creatively titled statute.
In October 2004, Congress enacted new Internal Revenue Code Section 409A, a creature of the Jobs Creation Act. According to those who know, this is nothing less than the most comprehensive regulation of nonqualified deferred compensation plans ever enacted.
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