The regulations under Section 457(f) provide planning opportunities for nonprofit entities in structuring deferred compensation and benefits for executives. This has become particularly important with the recent passage of tax reform legislation that adds a 21% tax penalty on most tax-exempt organizations that pay their “covered employees” compensation that either exceeds $1 million for the taxable year or is treated as an “excess parachute payment.” Compensation that is no longer subject to a substantial risk of forfeiture (i.e., “vested”) as defined under IRC Section 457(f) will be included for calculating these amounts in the year the compensation vests, even if it is paid, or taxed, in a subsequent year.

Employee benefits and ERISA counsel for nonprofit entities will need to master the ins and outs of IRC Section 457 and the proposed 457 regulations in order to advise their clients on how to structure compensation arrangements to not only maximize tax benefits for the executives and the organization, but also to minimize the amounts that will exceed the $1 million threshold or be treated as excess parachute payments.

In this practical webinar, you will learn from a critical analysis of IRS Section 457(f) regulations, identify implications of tax reform, and receive guidance on opportunities and limitations in structuring executive compensation plans for tax-exempt organizations.

Upon course completion, you will be able to:

  • Define IRC Section 457
  • Outline exceptions to Application of 457(f)
  • Recognize the interaction between 457(f) and 409A guidance
  • Identify substantial risks of forfeiture and deferred compensation, including:
    • Noncompete covenants
    • “Rolling risk of forfeiture”
    • Separation Pay Plans
  • Evaluate practical applications of 457(f) regulations
  • Identify other tax reform provisions affecting employ benefits at tax exempt organizations
  • Describe the 21 percent excise tax on payments over $1,000,000 or excess parachute payment, including:
    • Who is a covered employee?
    • What is an excess parachute payment?
    • Who is an applicable tax-exempt organization?
  • Plan vesting schedules and timing of cash payouts
  • Determine when deferral of current base salary is permitted
  • Evaluate whether a plan falls under both 409A and 457(f)

Prerequisites: None

Program Level: Intermediate

Field of Study: Taxes – Technical

Faculty Member
Marc Fosse

Mr. Marc Fosse focuses on all the tax, securities, corporate, and accounting issues related to executive and equity compensation arrangements. He works with publicly traded, private, non-profit and government clients in the design, implementation, and operation of domestic and international executive nonqualified and supplemental deferred compensation plans, as well as equity-based and other long-term incentive compensation arrangements. He regularly advises clients regarding handling of employee benefit matters in corporate mergers, acquisitions, divestitures, initial public offerings, and other corporate transactions.

Faculty Member
Josephine Gartrell

Josephine Gartrell, Director, Talent & Rewards, has over twenty years of experience specializing in compensation strategy and design in tax-exempt organizations. She co-leads Willis Towers Watson’s higher education talent and rewards practice and heads the practice group’s NCAA athletics division. She works with Boards of Trustees/Regents, committees of the Board, athletic directors, and other senior leadership to design compensation strategies that align with achievement of their performance goals. Ms. Gartrell has deep technical knowledge related to compensation, including executive compensation; benchmarking for enterprise shared services positions; benchmarking for coaches, assistant coaches, athletic directors, and staff; short-term and long-term incentive plan design; buy-out/severance agreements; retention; prevalence of benefits and perquisites; deferred compensation; retirement; total compensation philosophy; governance; compliance issues; and reasonableness of executive pay. She also assists with employment agreement/extension negotiations and drafting. She holds a J.D. from the University of San Diego School of Law. She is a Certified Executive Compensation Professional, and a member of [email protected]

CLE Credits (Law)

CreditValueTypeFormat
NALA--Credit not available
NFPA--Credit not available
AL1.5 General
On-Demand/Recording
AK1.5 General
On-Demand/Recording
ARNot Available General
On-Demand/Recording
AZ1.5 General
On-Demand/Recording
CA1.5 General
On-Demand/Recording
CO1.8 General
On-Demand/Recording
CT1.5 General
On-Demand/Recording
DE1.5 General
On-Demand/Recording
FL2 General
On-Demand/Recording
GA1.5 General
On-Demand/Recording
HI1.5 General
On-Demand/Recording
IA1.5 General
On-Demand/Recording
ID1.5 General
On-Demand/Recording
IL1.5 General
On-Demand/Recording
IN1.5 General
On-Demand/Recording
KSNot Available General
On-Demand/Recording
KY1.5 General
On-Demand/Recording
LA1.5 General
On-Demand/Recording
ME1.5 General
On-Demand/Recording
MN1.5 General
On-Demand/Recording
MO1.8 General
On-Demand/Recording
MSNot Available General
On-Demand/Recording
MT1.5 General
On-Demand/Recording
NC1.5 General
On-Demand/Recording
ND1.5 General
On-Demand/Recording
NE1.5 General
On-Demand/Recording
NH1.5 General
On-Demand/Recording
NJ1.8 General
On-Demand/Recording
NM1.5 General
On-Demand/Recording
NV1.5 General
On-Demand/Recording
NY1.5 Areas of Professional Practice (NY)
On-Demand/Recording
OH1.5 General
On-Demand/Recording
OK2 General
On-Demand/Recording
OR1.5 General
On-Demand/Recording
PA1.5 General
On-Demand/Recording
RI1.5 General
On-Demand/Recording
SCNot Available General
On-Demand/Recording
TN1.5 General
On-Demand/Recording
TX1.5 General
On-Demand/Recording
UT1.5 General
On-Demand/Recording
VANot Available General
On-Demand/Recording
VT1.5 General
On-Demand/Recording
WA1.5 Law and Legal Procedure
On-Demand/Recording
WI1.5 General
On-Demand/Recording
WV1.8 General
On-Demand/Recording
WY1.5 General
On-Demand/Recording

In some CLE states, the course will be submitted to the bar after you register. If for any reason the course is not approved, we will fully refund your registration fee. If a state is listed on this course, then we are confident the course fits that state's standards and already is or will be approved for credit.

Accounting Credits

CreditValueField of StudyFormat

Clear Law Institute is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org. For more information regarding administrative policies such as complaint and refund, please see the tab above on our Money-Back Guarantee or contact us at 703-372-0550. 

CPE Credit - Maximum Credit Hours: Please see above. You must attend at least 50 minutes to obtain credit. Fields of Study: Please see above. Teaching Method: Lecture. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state’s regulatory board.

Clear Law Institute has registered with the Texas State Board of Public Accountancy as a CPE Sponsor. This registration does not constitute an endorsement by the Board as to the quality of our CPE Program.

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