<nobr>May 20, 2005</nobr>

Question on ERIC's Recommendations to IRS Re: NQDC

ERIC's April 19, 2005, submission to the Treasury and IRS for future guidance regarding nonqualified deferred compensation plans recommended a change in the way grandfathered benefits are measured under nonaccount balance plans.

The following question has been raised: If ERIC's recommendation is accepted, how should the IRS measure the income that is subject to section 409A if the deferred compensation plan violates the requirements imposed by section 409A?

Please contact the ERIC office for a memorandum outlining this issue and proposing a solution.

Please review and respond (1) whether you agree with the proposed solution; (2) whether there are other solutions that you think should be considered by the Committee; (3) whether you see any related issues that should be considered or addressed. Please provide your responses to Janice Gregory of the ERIC staff [jgregory@eric.org; (202)789-1400] by the close of business Wednesday, May 11, 2005.

Thanks for your views and assistance in this matter.

Janice Gregory, Senior Vice President

Back to Previous Page