deferred compensation

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Deferred compensation

An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.

Deferred Compensation

Money or other compensation that has been earned but not yet received by the earner. Deferred compensation is not taxed until it is actually received, and is usually taxed at a lower rate when it is received (depending on one's income later in life). The most common form of deferred compensation is a retirement plan such as an IRA or 401(k), but stock options and other pensions also qualify.

deferred compensation

Compensation that is being earned but not received, a process that defers the taxes on the compensation until it is actually received at a later date. Deferred compensation includes various plans, some being pensions, profit-sharing, and stock options.

deferred compensation

payment schemes that pay lower wages during the early years of employment in an organization and higher wages in subsequent years. With deferred compensation schemes, a worker's remuneration increases with seniority and experience, which tend to improve the worker's efficiency within the organization. Such compensation schemes tend to reduce labour turnover and reduce SHIRKING. See PAY.

Deferred Compensation

Compensation that will be taxed when received or upon the removal of certain restrictions on receipt and not when earned. For example, contributions by an employer to a qualified pension or profit-sharing plan on behalf of an employee are considered deferred compensation. Such contributions will not be taxed to the employee until the funds are made available or distributed to the employee, usually upon retirement or separation from service.
References in periodicals archive ?
Although the IRS historically used the term "deferred compensation" to describe all types of arrangements that defer earnings, compensation, or income out into the future, there are only two major categories of deferred compensation, after the enactment of Code section 409A: nonqualified deferred compensation plans and qualified deferred compensation plans, which are specifically exempted from section 409A coverage.
Non-qualified deferred compensation plans are retirement plans that supplement qualified plans, such as pension plans or 401 (k) plans.
A non-qualified deferred compensation plan simply defers the payment of a portion of the employee's/independent contractor's compensation to a future date.
Since then, IRS officials write in IRS Revenue Procedure 2008-61, the IRS has discovered that the original no-rule policy keeps the IRS from "issuing private letter rulings with respect to estate and gift tax consequences of proposed inter vivos or testamentary transfers of fights under nonqualified deferred compensation plans, even though such issues do not directly involve the application of [Section] 409A," officials write.
Employers may deduct the annual deposit, a distinct advantage over traditional deferred compensation plans.
Congress snuffed this out by freezing the law of private deferred compensation plans in place with the principles set forth in regulations, rulings, and judicial decisions in effect immediately before the publication of Prop.
Adopting a non-qualified deferred compensation plan would require a comprehensive analysis of many factors (including some omitted from this article due to space limitations).
31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, to IRC Section 457 deferred compensation plan assets held in a fiduciary capacity.
Kissimmee Utility Authority (KUA) is soliciting proposals from qualified Deferred Compensation Plan Administrators wishing to serve as Recordkeeper for their two Defined Contribution Retirement Plans ( The Plans ).
Participants in a nonqualified deferred compensation plan can change their distribution selections in 2008 to match their long-term personal financial goals.
409A treats almost every compensation deferral arrangement as a nonqualified deferred compensation plan, unless it is specifically excluded.
Under section 409A, a nonqualified deferred compensation plan is broadly defined as any plan that provides for the deferral of compensation, except for (1) qualified employer plans (such as section 401(k) plans, pension plans and tax-deferred annuities), and (2) bona fide vacation leave, sick leave, compensatory time, disability pay, or death benefit plans.