<nobr>Apr 23, 2007</nobr>

ERIC Applauds Decision to Drop Deferred Compensation Provisions

For Immediate Release

Washington, D.C. -- ERIC applauds the decision by House and Senate tax-writing committee chairmen to drop from a final small business tax relief bill provisions that would limit the annual amounts that may be deferred under nonqualified deferred compensation plans. ERIC President Mark Ugoretz said, "We believe the tax-writing committee chairmen made the right decision. Congress should not be in the business of determining pay."

ERIC has been lobbying against inclusion of the provisions since the Senate Finance Committee included them in the Senate-passed version of H.R. 2, the Small Business and Work Opportunity Act of 2007. ERIC sent letters, submitted testimony, and met with tax-writing committee staff, arguing that the Senate provisions would not only curtail the compensation and benefits of far more employees than the executives referred to in the Finance Committee report, but that it was not appropriate for Congress to determine executive compensation among the myriad companies that compete for executive talent in a global economy.

The provisions would have restricted the deferred compensation that an employee may earn in a year to an amount equal to the lesser of $1 million or the employee's average annual pay over a five-year base period, would not have excluded earnings on previously deferred amounts, and would have excluded any type of benefit-restoration plan.

The provisions were also included in the Senate version of the emergency supplemental spending bill (H.R. 1591), which President Bush has indicated he would veto. Following a likely veto of H.R. 1591, the small business tax relief would most likely move on its own as stand-alone legislation.

Ugoretz added that "we do not believe we have seen the end of this effort; going forward, we need to make sure these provisions do not come back in other legislation."

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, N.W., Suite 350
Washington, DC 20005
(202) 789-1400 Fax (202) 789-1120

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