New IRS rules and regulations will target companies that offer their executives deferred compensation plans and arrangements. Deferred compensation plans have traditionally enabled executives to defer compensation beyond what would be apportioned to a 401k plan. These are benefits that are not available to the rest of the workforce and therefore attracted some unwanted attention.

The new Section 409A regulations will address all plans, programs, and arrangements that defer compensation from one tax year to another. The new regulations restrict an executive’s ability to change the timing or structure of his or her deferred compensation plan. Payment trigger events are now limited to termination, death, disability, or a change of control transaction. The regulations are prohibit elective acceleration of payments, except under very limited circumstances.