Nonqualified Plan Consultant 2: Advanced Plan Designs

• Identify the differences between qualified and nonqualified plans • Explain the difference between nonqualified deferred compensation plans and 401(k) plans • Explain how nonqualified deferred compensation plans are regulated • Identify different types of deferred compensation • Explain the future date distribution trigger • Explain emergency distributions • Explain disability distributions • Understand how deferred compensation may impact 401(k) plans • Define a long-term incentive plan (LTIPs) • Explain how LTIPs can be linked to corporate goals • List the different methods of payout for LTIPs: cash bonus, stock, and options • Explain how LTIPs are exempt from ERISA • Understand that LTIPs can be designed to be exempt from top-hat group requirements • List the benefits of stock plans • Explain how vesting can be used to craft a plan • Describe Restrictive Stock Awards and the attributes that differentiate it from other plans • Describe Restricted Stock Units and the attributes that differentiate it from other plans • Describe Phantom Stock and the attributes that differentiate it from other plans • Compare and Contract Restrictive Stock Awards, Restricted Stock Units, and Phantom Stock • Understand the process of helping a client to choose a stock-based plan based on their corporate goals • Describe Incentive Stock Options and the attributes that differentiate it from other plans • Describe Nonqualified Stock Options and the attributes that differentiate it from other plans • Describe Stock Appreciation Rights and the attributes that differentiate it from other plans • Understand the process of helping a client to choose an options-based plan based on their corporate goals • Compare and contrast Incentive Stock Options, Nonqualified Stock Options, and Stock Appreciation Rights • Describe how nonqualified plans are used by not-for-profit organizations • Describe how IRC 457 governs nonprofit organization nonqualified plans including deferral limits, catch-up contributions, and required minimum distributions • Define 457(b) plans • Define 457(f) plans • Describe the difference between funded and unfunded plans • Describe the funding method for 457(b) plans • List the distributions circumstances for 457(b) plans: termination of employment, death, unforeseeable emergency, and age • List the distributions circumstances for 457(f) plans: time/age, death, disability, and termination of employment • Describe the delay of vesting and taxation of 457(f) plans • Describe the delay of vesting and taxation of 457(b) plans • Describe when a 457(f) plan may be eligible to use COLI informal funding • Understand that nonprofit organizations compensation reporting, IRS Form 990, can impact nonqualified plan development • Define a permanent life insurance contract • Define Restrictive Endorsement Bonus Arrangements (REBA) • List the employee or employer rights to make changes to a REBA • Describe the different vesting methods for a REBA • Understanding that REBA may be subject to ERISA • Define a Split Dollar Arrangement • List the types of Split Dollar Arrangements: Endorsement and Collateral methods • Define the Endorsement Method structure • Define Collateral Method Structure • Define Loan Regime Approach • Describe the Interest on Loan Regime Approach • Compare and Contrast the Endorsement and Collateral methods of structure • Describe how the cash value of life insurance can be used informally fund nonqualified deferred compensation plans • Describe the Seven-Pay Test • Define Modified Endowment Contract (MEC) • Describe the disadvantages of MEC as opposed to non-MEC policies • Define Bank-Owned Life Insurance and Credit Union Owned Life Insurance • Describe Split Dollar Arrangement plan documentation • Identify and explain the various financing options for nonqualified plans • Describe the growth of cash value in a life insurance policy • List the advantages of a life insurance contract: tax-advantaged growth, First-in/First-out (FIFO) withdrawals, tax-free policy loans, and tax-free benefits • Describe how Corporate Life Insurance (COLI) fits into the life insurance market • List the advantages and risks of COLI • Explain the decision-making process for using COLI to informally fund nonqualified deferred compensation plans • Understanding the use of COLI to offset the nonqualified plan on the corporate balance sheet • Describe how COLI funding differs from taxable investments for funding • Understand deferred compensation expense, interest cost, liability, asset, and tax expense • Describe how nonqualified plans are listed on the corporate balance sheet and income statement including: contributions, earnings, distributions, and forfeitures • Understand the role of insurance products in nonqualified deferred compensation plans • Explain who is included in the Top Hat group • Understand how much can be deferred • Explain the Top Hat plan requirements • Explain the 409A plan • Define Nonqualified plans • Explain short-term deferrals for compensation • Understanding how to extend deferral elections • Understanding what happens when there is a change of control • Explain the process when there is a separation from service • Explain the prohibitions against accelerating benefits • Explain how distributions are made from terminated plans • Understanding vesting • Identify the options for limited plan protection • Describe how establishing a Rabbi Trust can provide some protection to the employee • List the primary risks of a nonqualified plan • Understand that S Corporations may benefit from an unfunded define benefit SERP type of arrangement • Explain the tax advantages • Identify common tax liabilities • Explain constructive receipt • Explain economic benefit • Explain payroll taxes • Explain how to prepare for federal/state income tax planning • Explain Medicare surtax planning • Describe the tax considerations for REBA • Describe how a Rabbi Trust is taxed • Describe FICA taxation including the special timing rule including present value versus whole dollar, non-duplication rule, and Top Hat Status • Describe Medicare Taxation on deferred compensation • Describe how nondeferred compensation plans are booked by C Corporations • Describe how pass-through entities are impacted by FICA/FUTA taxes • Explain the proper documentation that is needed. • Identify what advisors need when engaging clients about nonqualified deferred compensation plans • Identify expert partners advisors can leverage when offering nonqualified deferred compensation plans • Explain the reporting process • Explain 409A Operational Errors • Understand IRS penalty taxes • Understand the regulations that govern COLI such as consent of participants and filing of Form 8925 • Describe the tax regulations that relate to COLI and nonqualified deferred compensation plans