Client Bulletin

RCG Interprets IRS Notice 2007-86

Plan Sponsors Granted One Year Extension on Compliance to Regulations

SAN DIEGO, Oct 25, 2007 -- Retirement Capital Group, Inc. (RCG) informs its plan sponsors of the October 22nd release of Internal Revenue Service (IRS) Notice 2007-86 which grants an additional one year extension to December 31, 2008 to comply with IRS §409A.
Notice 2007-86 now supersedes Notice 2007-78 and stipulates that documentary compliance, distribution elections and good faith compliance for nonqualified deferred compensation (NQDC) plans will be accomplished by December 31, 2008 versus December 31, 2007, as earlier set by Notice 2007-78.

Significantly, the transition rules under Notice 2007-78, which allow plans to be amended for new payment elections, originally scheduled to expire on December 31, 2007, have been extended to December 31, 2008. Thus, plan sponsors have an additional 12 months to allow for new elections to the time and form of payment. These new elections cannot be applied to amounts that would have been payable in 2008 or to accelerate distributions into 2008 that would have otherwise been payable at a later date.

"Importantly, plan sponsors are also required to operate their plans in good faith compliance with §409A," explains William MacDonald, Chairman and CEO of Retirement Capital Group. "We recommend that our clients follow all appropriate guidelines, and consider a careful and thorough review of their current plans to ensure proper compliance by the new effective date of January 1, 2009. There can be no margin for error in meeting final regulations for nonqualified deferred compensation plans."

About Retirement Capital Group:

RCG offers nonqualified executive benefit consulting services in the area of plan structure, design, benefit security, funding, implementation, and administration. RCG's unbundled approach is a paradigm shift, providing companies access to proprietary and creative solutions, the highest caliber of experts in the executive benefits marketplace, and a network of third-party administrators. RCG's corporate headquarters is located in San Diego, California.

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