Deferred Compensation Agreements

The Citadel Law Corporation’s experienced business attorneys negotiate and review employer-employee agreements that include deferred compensation plans. Deferred compensation is income earned in one year but paid out in a subsequent year. Deferred compensation agreements are the arrangements between an employer and an employee to withhold a portion of an employee’s earned income and pay it at a specified later date. A deferred compensation plan can provide employees with retirement income and a current tax deferral, as deferred income usually is not taxed until it is received. Deferred income also collects interest during the deferment period.

There are two kinds of deferred compensation agreements: qualified plans and nonqualified deferred compensation plans. Qualified plans are regulated by ERISA (the Employee Retirement Income Security Act of 1974), while nonqualified deferred compensation plans (non-qualified because they are outside the scope of ERISA) are regulated by Internal Revenue Code Section 409A. Qualified plans like 401(k)s and IRAs normally set aside funds to be paid to employees during retirement. Non-qualified deferred compensation plans are not limited in the amount or type of compensation that can be deferred. Deferred compensation plans provide an incentive for employees to stay with the company since employees may risk their compensation plan if they change employers.

When an employer refuses to comply with the terms of a deferred compensation retirement plan, contact an experienced Los Angeles County deferred compensation agreements attorney at the Citadel Law Corporation. We also work on behalf of employees who may have additional rights under ERISA when an employer misclassifies a qualified deferred compensation plan as a non-qualified plan. The business attorneys at the Citadel Law Corporation offer a wide range of business-related legal services. Retain the trustworthy legal counsel you need and contact an Orange County business attorney at the Citadel Law Corporation to discuss your legal needs. Call 949-852-8181 to schedule an appointment with an attorney today.