Noteworthy Information

IRS Releases Final Version of Form 8925 for Reporting COLI/BOLI Contracts

With this new form the Internal Revenue Service (IRS) provides specific guidance on how to satisfy the reporting requirements for employers who maintain Corporate-Owned Life Insurance/Bank-Owned Life Insurance (COLI/BOLI) contracts subject to IRC Section 101(j) “best practices” under the Pension Protection Act of 2006.

See the January 2008 NYLEX News Alert, under Articles of Interest.

IRS Extends Documentation Deadline for Code Section 409A Compliance

The Internal Revenue Service recently issued Notice 2007-78, providing additional guidance on the application of Section 409A of the Code to deferred compensation plans. While the deadline for bringing documents into compliance with the final section 409A regulations has been extended one-year until December 31, 2008, all plans must be operationally compliant with the final regulations by January 1, 2008.

See the September 2007 NYLEX News Section 409A Alert, under Articles of Interest.

Proposed Restrictions on Deferred Compensation

In February 2007, restrictions on deferred compensation were proposed in the Senate's small business tax relief bill. The House passed version of this bill includes no such restrictions and the bills now go to conference to be reconciled. Many businesses and organizations have vigorously protested these proposed restrictions and many newspapers have published editorials characterizing these proposals as unnecessary and misguided. Readers are encouraged to express their concerns to their Members of Congress.

For a detailed discussion of these restrictions, see the February 2007 edition of NYLEX News, under Articles of Interest.

FAS 158

In September 2006 the Financial Accounting Standards Board issued FAS 158, “Employers’ Accounting for Defined Benefit Pension and Other Post-Retirement Plans”. This Statement affects the financial statement reporting of various post-retirement plans, including SERPs. FAS 158 is effective calendar 2006 for public companies and the following year for all others.

For a detailed discussion of the FAS 158 changes to the accounting for and financial statement disclosure of retirement plans see “Accounting for SERP Programs” under Financial Reporting.