Companies have had several years to transition to 409A, which only recently kicked in fully. Congress changed the rules on deferred compensation plans in 2004 to keep executives from taking the money and running when a company fails, as many did at Enron Corp. in 2001.
The prospect of higher tax rates next year has spurred particular interest in the rules. In the past few months, say compensation consultants, executives have been trying to get their arms around the rules, believing tax rates will rise next year and hoping to take the income now at lower rates.
The changes the ABA group is proposing won't make it easier for these executives to take money from the plans, according to the lawyers.
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