Deferred Compensation Plan For Highly Compensated Employees In Cook
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State:
Multi-State
County:
Cook
Control #:
US-00418BG
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Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.
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Cook County offers a Section 457 deferred compensation plan as a tax-deferred method for you to save for retirement. The plan must be limited to provide benefits for a select group of management or highly compensated employees.Some deferred compensation contracts provide that benefits are payable immediately if an employee dies or becomes disabled during the eligibility period. Deferred compensation allows employees to defer payment of an agreed-upon portion of their earned income to a future date, usually retirement.