We are pleased to share the news that Senator Portman will offer an amendment during the Senate Finance Committee markup to repeal the nonqualified deferred compensation provision (insert specific bill text) that would negatively impact many associations. Please thank Senator Portman for his support on this important issue.
We are asking association professionals and industry partners to call or email members of the Senate Finance Committee asking them to support Portman’s amendment during the markup.
We encourage association professionals to call or email members of the Senate Finance Committee and ask them to vote for the Portman Amendment on deferred compensation. To see a list of members of the Finance Committee along with links to their websites, click here. Republican members of the Senate Finance Committee will drive this issue, so members in the majority will be the most helpful at this time. Still, members on both sides of the aisle will have an important vote.
Nonqualified deferred compensation
The chairman’s mark proposes to eliminate nonqualified deferred compensation arrangements for nonprofit employers like associations. The legislation eliminates 457 plans outright, without grandfathering existing arrangements. For employees who have 457 arrangements, they would be faced with their existing balances being taxed by 2026, disrupting their personal financial planning and retirement outlook. This provision hurts nonprofit employees who in good faith entered into contractual agreements with their employers, and are counting on this benefit as part of their retirement planning.
This provision also hurts nonprofit employers in attracting and retaining top talent. Large nonprofits are complex organizations that demand a high level of executive leadership. Nonprofit employers can’t offer performance stock options, but 457 plans are an alternative benefit, allowing nonprofits to offer key employees a limited amount of nonqualified vested deferred compensation to supplement the retirement benefits.
Because of the potential impact of this provision on retirement planning and executive recruitment and retention, we urge the Senate to consider grandfathering existing deferred compensation plans past the current pay-out year of 2026.
Thank you for your support on this important issue. If you have any questions please call 202-626-2703 or email email@example.com.