The Internal Revenue Service recently released long anticipated proposed regulations (the “Proposed Regulations”) governing deferred compensation arrangements maintained by tax-exempt organizations and governmental entities under Section 457 of the Internal Revenue Code (the “Code”). The Proposed Regulations provide important interpretive guidance and clarifications on key issues around the design and operation of deferred compensation plans and arrangements that are subject to Code Section 457(f) (“Section 457(f)”). Helpfully, the Proposed Regulations permit some design features whose permissibility previously had been unclear, and liberalize certain positions previously taken by the IRS with respect to 457(f) Arrangements.
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