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409A Relief Still Available for Non-Vested Amounts?

Melissa Klein Aguilar | April 7, 2009

While the deadline for amending most non-qualified deferred compensation arrangements to comply with Section 409A has passed, employers may still have a chance to bring certain “non-vested” arrangements into compliance with plan document requirements if they act quickly, according to attorneys in the law firm McGuireWoods.

The deadline to comply with the onerous thicket of 409A rules was Dec. 31, 2008. While there’s a limited correction program for certain operational failures, so far there’s no such program for document violations. As a result, even a “minor and wholly unintended defect” in the documents constituting a non-qualified deferred compensation arrangement will automatically result in a Section 409A violation, regardless of the magnitude or whether the offending provision benefitted the employee, notes an April 6 McGuireWoods alert.

Thanks to the resulting taxes and penalties, that...

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