Pitfall questions for NDCPs attempting to successfully navigate an M&A transaction

Nonqualified deferred compensation plan (NDCP) sponsors can experience challenges during a merger and acquisition (M&A) due diligence test because of Internal Revenue Code (IRC) Section 409A compliance. However, even if all the NDCPs pass this potential problem, there are still other challenges to solve before this critical examination is completed. Two such questions are “fit” related: (1) will the NDCPs still fit within the top-hat exemption post-merger; and (2) have the NDCPs Federal Insurance Contributions Act (FICA) taxes been properly applied to the benefits? In this article, Milliman’s Dominick Pizzano and White & Case’s Henrik Patel prepare NDCP sponsors to address these two important topics and alert them to any trick questions they may pose.

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