Kirkland Alert Kirkland & Ellis LLP

Nonqualified Deferred Compensation Arrangement Changes and Automatic IRA Rollover of Cash-Out Distributions

This alert highlights two important changes in the laws governing employee benefits. First, the American Jobs Creation Act of 2004, signed by President Bush on October 22, radically alters the income tax rules for deferred compensation, generally effective January 1, 2005. Second, the Department of Labor issued final regulations on a safe harbor for plan sponsors to select providers and investments for mandatory rollovers from qualified plans to individual retirement accounts.