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Attorneys' Queries Continue On IRS Private Ruling on Deferred Comp Plans

WEST PALM BEACH, Fla. - A recent IRS private letter ruling regarding deferred compensation plans continues to spark the interest of many attorneys. Credit Union Times has received e-mails and phone calls from at least a dozen attorneys wanting to know more about the April 9 letter involving an FCU's...

By Staff Writer | Updated on May 25, 2004

WEST PALM BEACH, Fla. – A recent IRS private letter ruling regarding deferred compensation plans continues to spark the interest of many attorneys. Credit Union Times has received e-mails and phone calls from at least a dozen attorneys wanting to know more about the April 9 letter involving an FCU’s attempt to establish a non-qualified deferred compensation plan to provide benefits to an executive and whether Section 457 of the IRS Code provides rules regarding the taxation of such plans of eligible employers, according to Lawrence Gallagher, the attorney who represented the credit union. On the surface, it appears that the FCU client was given the go-ahead to offer the plan under a “for profit” model, which in the long run could be more financially advantageous than the models currently being used by credit unions. Meanwhile, CUNA Mutual Group said it would issue an advisory to credit unions on several options on how to proceed including submitting a revenue ruling to Treasury, which would have broader industry impact.

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