In addition to providing qualified plans to employees, many business owners implement nonqualified alternatives in order to supplement retirement benefits. These selective benefit plans are generally offered to key employees and owners. One popular nonqualified benefit is deferred compensation.
Basically, nonqualified deferred compensation refers to an arrangement between an employer and an employee in which compensation for current services is postponed until some future date or the occurrence of a future event. The effect is to postpone taxation for the employee until compensation is received – usually at retirement or disability.
Types of Deferred Compensation
Deferred compensation plans can be categorized several different ways. Plans can be:
Funded or unfunded.
Forfeitable or nonforfeitable.
Defined benefit or money purchase.
They can also provide one or a combination of death benefits, disability benefits and retirement benefits.
Funded plans generally involve a trust fund or escrow account where the employer transfers money at a later date for its “promise to pay” deferred compensation. These are not very popular as the participant may be deemed to have “constructive receipt” of such funds and therefore inherits a current tax liability when funded.
IRS Revenue Ruling 60-31, 1960-2 CB 174, states that an employee’s right to receive deferred compensation, backed during the deferral period solely by an employer’s “naked promise” to pay, produces no currently taxable income for the employee. A deferred compensation plan is not regarded as funded merely because the corporation purchased and owns a life insurance policy or annuity contract to make certain that funds will be available when needed.
Rabbi Trusts
One of the problems with a typical unfunded deferred compensation plan is that the employee has no guarantee that future payments will be made. If the employer defaults in making promised payments, becomes insolvent, or files bankruptcy, the employee simply becomes a general creditor waiting in line with all the other creditors hoping to recoup some of their receivables.
The rabbi trust protects an executive from an employer’s future unwillingness or inability to pay promised benefits while retaining the benefits of deferred income taxation. The IRS has stated in a series of private letter rulings that an irrevocable trust or an escrow account can be established to fund a deferred compensation agreement as long as the assets placed into the rabbi trust remain subject to the claims of general creditors. If this condition is met, the employee will not be deemed to have “constructive receipt” of the assets, and, therefore, will not have received a current economic benefit. Hence, the employee will not be required to pay taxes until the payments are made at a future date.
The rabbi trust gives the employee security in knowing that the employer is, in fact, setting aside money to fulfill its obligation under a deferred compensation agreement.
We firmly believe that the internet should be available and accessible to anyone, and are committed to providing a website that is accessible to the widest possible audience, regardless of circumstance and ability.
To fulfill this, we aim to adhere as strictly as possible to the World Wide Web Consortium’s (W3C) Web Content Accessibility Guidelines 2.1 (WCAG 2.1) at the AA level. These guidelines explain how to make web content accessible to people with a wide array of disabilities. Complying with those guidelines helps us ensure that the website is accessible to all people: blind people, people with motor impairments, visual impairment, cognitive disabilities, and more.
This website utilizes various technologies that are meant to make it as accessible as possible at all times. We utilize an accessibility interface that allows persons with specific disabilities to adjust the website’s UI (user interface) and design it to their personal needs.
Additionally, the website utilizes an AI-based application that runs in the background and optimizes its accessibility level constantly. This application remediates the website’s HTML, adapts Its functionality and behavior for screen-readers used by the blind users, and for keyboard functions used by individuals with motor impairments.
If you’ve found a malfunction or have ideas for improvement, we’ll be happy to hear from you. You can reach out to the website’s operators by using the following email
Our website implements the ARIA attributes (Accessible Rich Internet Applications) technique, alongside various different behavioral changes, to ensure blind users visiting with screen-readers are able to read, comprehend, and enjoy the website’s functions. As soon as a user with a screen-reader enters your site, they immediately receive a prompt to enter the Screen-Reader Profile so they can browse and operate your site effectively. Here’s how our website covers some of the most important screen-reader requirements, alongside console screenshots of code examples:
Screen-reader optimization: we run a background process that learns the website’s components from top to bottom, to ensure ongoing compliance even when updating the website. In this process, we provide screen-readers with meaningful data using the ARIA set of attributes. For example, we provide accurate form labels; descriptions for actionable icons (social media icons, search icons, cart icons, etc.); validation guidance for form inputs; element roles such as buttons, menus, modal dialogues (popups), and others. Additionally, the background process scans all of the website’s images and provides an accurate and meaningful image-object-recognition-based description as an ALT (alternate text) tag for images that are not described. It will also extract texts that are embedded within the image, using an OCR (optical character recognition) technology. To turn on screen-reader adjustments at any time, users need only to press the Alt+1 keyboard combination. Screen-reader users also get automatic announcements to turn the Screen-reader mode on as soon as they enter the website.
These adjustments are compatible with all popular screen readers, including JAWS and NVDA.
Keyboard navigation optimization: The background process also adjusts the website’s HTML, and adds various behaviors using JavaScript code to make the website operable by the keyboard. This includes the ability to navigate the website using the Tab and Shift+Tab keys, operate dropdowns with the arrow keys, close them with Esc, trigger buttons and links using the Enter key, navigate between radio and checkbox elements using the arrow keys, and fill them in with the Spacebar or Enter key.Additionally, keyboard users will find quick-navigation and content-skip menus, available at any time by clicking Alt+1, or as the first elements of the site while navigating with the keyboard. The background process also handles triggered popups by moving the keyboard focus towards them as soon as they appear, and not allow the focus drift outside of it.
Users can also use shortcuts such as “M” (menus), “H” (headings), “F” (forms), “B” (buttons), and “G” (graphics) to jump to specific elements.
We aim to support the widest array of browsers and assistive technologies as possible, so our users can choose the best fitting tools for them, with as few limitations as possible. Therefore, we have worked very hard to be able to support all major systems that comprise over 95% of the user market share including Google Chrome, Mozilla Firefox, Apple Safari, Opera and Microsoft Edge, JAWS and NVDA (screen readers), both for Windows and for MAC users.
Despite our very best efforts to allow anybody to adjust the website to their needs, there may still be pages or sections that are not fully accessible, are in the process of becoming accessible, or are lacking an adequate technological solution to make them accessible. Still, we are continually improving our accessibility, adding, updating and improving its options and features, and developing and adopting new technologies. All this is meant to reach the optimal level of accessibility, following technological advancements. For any assistance, please reach out to