Candace Quinn and Frances Rivera-Medero Published in Executive Compensation Library

Candace Quinn and Frances H. Rivera-Medero’s article, “Substantial Risk of Forfeiture and Bona Fide Severance: Synchronizing the Layers of Sections 457(f) and 409A,” was published in the May 2008 issue of BNA's  Executive Compensation Library Journal Reports: Law and Policy.

Candace and Frances note that “the Internal Revenue Service announced its intent to provide guidance under I.R.C. §457 regarding the definition of bona fide severance pay plans excluded from the application of §457 under §457(e)(11), and regarding the definition of substantial risk of forfeiture for purposes of excluding amounts from gross income under an ineligible deferred compensation plan under §457(f).” The authors discuss important divergent aspects of Sections 457(f) and 409A and expect that the forthcoming changes under Sec. 457(f) would conform to guidance already issued pursuant to Section 409A. Candace and Frances conclude that many plan arrangements that were accepted by the authorities in the past will have to be amended for compliance with the guidance expected from the IRS.