Legislative Update

In the previous RCG Newsletter, Bill MacDonald provided an overview of the proposed legislation regarding deferred compensation plans circulating in Congress. More importantly, Bill listed critical planning opportunities and solutions to address the proposed legal changes which would be enacted if the legislation were to be put into law. Since that time, many of our clients have asked about the likelihood of this legislation being enacted in 2004, especially given the election. We often heard the relevant question - Why should we make any changes if the legislation will not be enacted into law?

We do not presume to fully understand the workings of Congress, especially in an election year, nor do we have the ability to define the legislative calendar. However, clear indications exist that the legislation in both the House and Senate had momentum. That momentum continues and has resulted in legislation being passed in both the House and Senate that includes the deferred compensation provisions discussed in our previous Newsletter.

We were impressed with the recent article by Frederic W. Cook, & Co., Inc. summarizing the current status of the legislation and have included a copy of that article, by permission (click here). For your information, Frederic W. Cook, & Co. is one of the preeminent executive compensation consulting firms in the country and works extensively with management and boards of Fortune 1000 companies.