deferred compensation


Also found in: Wikipedia.

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 ?
Amid the tangle of revelations and accusations relating to Liane Richardson's firing as Lane County administrator, one detail should not be overlooked: The county has a deferred compensation committee that operates with little or no oversight.
Typically, for a large benefits contract, there's a lot of lobbying,'' said William Fujioka, head of the city's Personnel Department and chairman of the city's Deferred Compensation Board.
NDC), with an option to acquire the administrator of deferred compensation programs for public employees.
In the appropriate situation, deferred compensation provides the greatest advantages of all the non-qualified executive fringe benefit plans to both the employer and the employee.
Merely labeling a deferred compensation plan as a severance pay plan will not result in the arrangement qualifying as a bona fide severance pay plan.
Deferred compensation allows contributions by a company to a plan on behalf of a select group of management or highly compensated employees in anticipation of a payout sometime in the future.
Net income, excluding deferred compensation plan income, rose 62 percent, from $12.
Notice 2006-79 extends the effective date and transition relief for most nonqualified deferred compensation arrangements under Sec.
A white paper from The Principal([R])analyzes the impact nonqualified deferred compensation plans have on employers and their key employees.
As explained in TEI's Comments Foster Taxpayer Victories in Pennsylvania, there were positive indications that the Commonwealth of Pennsylvania had decided to concede two cases involving the issue of when deferred compensation becomes subject to the Commonwealth's personal income tax.
executives, the new law makes changes to nonqualified deferred compensation in three areas--Elections to Defer, Distributions and Inclusion in Income--and sets requirements in each area.