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 ?
As for income tax withholding, income realized by the nonemployee spouse on the exercise of NQSOs and amounts distributed to the nonemployee spouse from the nonqualified deferred compensation plans are deemed wages subject to income tax withholding.
He was most concerned with the abuse of deferred compensation in high-profile bankruptcies that left the employees and shareholders penniless while the executives walked away with enormous sums from their deferred compensation plans.
To benefit from nonqualified deferred compensation plans, C corporation shareholder-owners should
On January 6, 1994, Tax Executives Institute filed the following comments with the Internal Revenue Service on proposed regulations under section 404A of the Internal Revenue Code, relating to limitations on deductions and adjustments to earnings and profits with respect to certain foreign deferred compensation plans.
409A-compliant documents, plan summary and enrollment communications materials for use with 409A nonqualified deferred compensation plans and supplemental retirement plans are now available from the Deferral+(R) and Advisorfolio(TM) automated design platforms.
457 deferred compensation plans, under which state and local governments and tax-exempt entities must meet certain eligibility standards and limits not applicable to plans of taxable entities.
Supreme Court has rejected for review the Albertsons case, in which the Ninth Circuit Court of Appeals first said the interest component of deferred compensation plans was deductible and then reversed itself.
In designing and implementing nonqualified deferred compensation plans, companies must balance the demands of the tax law with the desires of their employees for security and preservation of company assets to pay the promised compensation.
Funding Mechanisms for Nonqualified Deferred Compensation Plans and Arrangements
Under a 2002 divorce agreement, H transferred to his wife W one third of the NQSOs and a significant portion of the deferred compensation plans.
The project will cover all state and local government entities except defined benefit pension plans and Internal Revenue Code section 457 deferred compensation plans.
9041052 (July 17, 1990), an employer set up a rabbi trust as a reserve for payments required under deferred compensation plans established five years previously.