Ways and Means Republicans advanced the Tax Cuts and Jobs Act this afternoon after Chairman Kevin Brady (R-TX) made a few revisions, including a change that preserves the deferred compensation arrangements that many associations use to attract and retain top executives.

ASAE delivered a sign-on letter to House and Senate tax-writers last night expressing concern with a provision in the House tax bill that would have effectively eliminated the Section 457 plans that many nonprofit employers offer as a benefit to key employees to help supplement their retirement income.

ASAE and the associations who signed onto the letter contended that eliminating 457 plans outright, without grandfathering existing arrangements, would be unfair. It would hurt 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. Nonprofit employers can’t offer top executives stock options, so 457 plans are an alternative benefit that associations and other nonprofit groups can utilize to provide key employees a limited amount of nonqualified vested deferred compensation to supplement their retirement benefits.

“ASAE is pleased that the committee acted to preserve 457 plans as an important benefit to key employees of associations and other tax-exempt entities,” said ASAE President and CEO John Graham. “This provision would have really hurt nonprofit employers in attracting and retaining top talent.”

The tax bill could still be changed on the House floor, which could happen as early as next week. The Senate also released a “conceptual” tax plan today that has a number of key differences from the House bill.

ASAE will continue to watch this tax reform process closely for proposals that impact the association and tax-exempt sector.