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.
An arrangement in which a portion of an employee's income is paid out at a date after which that income is actually earned. Examples of deferred compensation include pensions, retirement plans, and stock options. The primary benefit of most deferred compensation is the deferral of tax.
A nonqualified deferredcompensation arrangement may be structured as an account for the employee (similar to a defined contribution or individual account plan) or may provide for specified benefits to be paid to the employee (similar to a defined benefit pension plan).
If compensation is deferred under a plan of a tax-exempt employer that is not an eligible deferredcompensation plan (an “ineligible plan”), the deferred amounts are includible in the income of a participating employee when the deferredcompensation is not subject to a substantial risk of forfeiture, even if the deferredcompensation is not funded.
A nonqualified deferredcompensation arrangement may be a very useful and valuable compensation tool for a cooperative to provide incentives to a key employee or employees to perform services for the cooperative so that desired performance objectives may be achieved or to encourage a key employee or employees to remain with the cooperative.
All amounts of compensationdeferred under the Plan shall be transferred to a trust established under the Plan within a period that is not longer than is reasonable for the proper administration of the accounts of Participants.
All amounts of compensationdeferred under the Plan shall be transferred to an annuity contract described in section 401(f) of the Internal Revenue Code within a period that is not longer than is reasonable for the proper administration of the accounts of Participants.
All amounts of compensationdeferred under the Plan shall be transferred to a custodial account described in section 401(f) of the Internal Revenue Code within a period that is not longer than is reasonable for the proper administration of the accounts of Participants.
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