Deferred Compensation

Report your deferred compensation in Schedule A, and report your continued participation in a deferred compensation plan in Schedule C, Part II. Report your spouse’s deferred compensation in Schedule A only.

Deferred compensation can take many forms, and the reporting requirements will vary based on the timing of the compensation and its form. The examples below are intended to be merely illustrative of the various forms that deferred compensation may take. Regardless of the form of your deferred compensation, you should work with an ethics official at your agency to ensure complete and accurate disclosure.

Our guidance on deferred compensation is broken into the following sections:

Schedule A – five examples
Example 1: Already Received Lump Sum Cash Payment
Example 2: Future Lump Sum Cash Payment That is Fixed
Example 3: Payments in the Form of Assets – Received or Anticipated
Example 4: Deferred Compensation Plan with Underlying Assets
Example 5: Deferred Compensation Plan Linked to an Index or Other Benchmark

Schedule C – general instructions for all types

For You (or Your Spouse)

Schedule A

Example 1: Already Received Lump Sum Cash Payment

You may have already received your deferred compensation, and it may have taken the form of a lump sum cash payment. In that case, report the lump sum cash payment that you received if the amount was more than $200 ($1,000 for your spouse).

Block A: Report the name of the employer providing the payment. If the employer is not a publicly traded company, provide the employer’s line of business and location (city and state). Also write “deferred compensation: cash payment received” in Block A.

Block C: In the “Other Income” column, provide the exact amount of your lump sum payment. Do not provide the amount of your spouse’s lump sum payment.

Example 2: Anticipated Future Lump Sum Cash Payment That is Fixed

You may not have received your deferred compensation, but your employer may owe you deferred compensation in the future in the form of a lump sum cash payment. That lump sum payment may be a fixed, as opposed to variable, amount that has already been determined. In that case, this example provides guidance on reporting the fixed amount lump sum payment that your employer owes you.

Instead of being fixed, the amount of your future lump sum payment may depend on the performance of investments. Alternatively, it may depend on the performance of something tracked, such as an index, a mutual fund, or some other benchmark. In either of those cases, Example 2 would not apply to your situation. You should refer to either Example 4 or 5 below for guidance on a “Deferred Compensation Plan with Underlying Assets” or a “Deferred Compensation Plan Linked to an Index or Other Benchmark.”

Block A: Report the anticipated lump sum cash payment if the fixed amount that you are owed is more than $1,000. Report the name of the employer providing the payment. If the employer is not a publicly traded company, provide the employer’s line of business and location (city and state). Also write “deferred compensation: cash receivable” in Block A.

Block B: Mark the column that corresponds to the value of the fixed lump sum payment that you are owed.

Block C: Mark the column labeled “None (or less than $201)” because you have not yet received the fixed lump sum payment.

Example 3: Payments in the Form of Assets – Received or Anticipated

You may have an arrangement for deferred compensation in the form of assets or options, rather than cash. If you have not yet received the deferred compensation, provide the name of the employer and write “deferred compensation receivable” in Block A. If the employer is not a publicly traded company, also provide the employer’s line of business and location (city and state). Then, report the assets using the guidance appropriate for that type of asset (e.g., stock, stock options, restricted stock, stock appreciation right, phantom stock, and restricted stock units).

Example 4: Deferred Compensation Plan with Underlying Assets

This example addresses the situation of a deferred compensation plan through your employer only if you have a plan that holds underlying assets and have determined, in consultation with your employer or attorney, that this plan is accurately described as a “deferred compensation” plan. In this case, report the deferred compensation plan and each underlying asset of the plan that individually was worth more than $1,000 at the end of the reporting period or that individually produced more than $200 ($1,000 for your spouse) in income during the reporting period.

Block A: Provide the name of the employer. If the employer is not a publicly traded company, also provide the employer’s line of business and location (city and state). Write “deferred compensation.” Below that general description, list the names of each underlying asset within the plan that individually was worth more than $1,000 at the end of the reporting period or that individually produced more than $200 in income during the reporting period.

Block B: For each underlying asset reported, mark the column that corresponds to its value.

EIF: Just to the right of Block B is a column identified as “Excepted Investment Fund” (EIF). Mark the “Excepted Investment Fund” column for each underlying asset that qualifies. If the underlying asset does not qualify as an excepted investment fund, you also need to determine whether this underlying asset itself had assets of its own. If so, you will need to report each underlying asset that was worth more than $1,000 at the end of the reporting period or that produced more than $200 ($1,000 for your spouse) in income during the reporting period.

Block C: For each underlying asset reported, mark the columns that correspond to the amount and type(s) of income produced during the reporting period. (Note: If the asset is an excepted investment fund, you still must provide the amount of income, but you do not need to provide the type of income.)

Example 5: Deferred Compensation Plan Linked to an Index or Other Benchmark

You may have an interest in a deferred compensation plan under which your employer owes you a future lump sum payment that is not fixed but variable.

The amount of that future lump sum payment may depend on the performance of something tracked, such as an index, a mutual fund, or some other benchmark. However, you do not, through the deferred compensation plan, own the thing being tracked. (For instance, the plan may track the performance of the S&P 500 or the performance of a mutual fund that mirrors the S&P 500. However, you do not hold, through the deferred compensation plan, shares of the companies listed on the S&P 500 or shares of the mutual fund. Instead, your employer owes you a cash payment, and your employer may pay more money if the S&P 500 performs well or may pay less money if the S&P 500 performs poorly.)

This example provides guidance on reporting the variable amount lump sum payment of deferred compensation that your employer owes you.

Report your interest in the plan if the value of your interest was more than $1,000 at the end of the reporting period, or if your interest produced more than $200 ($1,000 for your spouse) in income during the reporting period.

Block A: Provide the name of the employer. If the employer is not a publicly traded company, also provide the employer’s line of business and location (city and state). Write “deferred compensation” and specify the index or other benchmark that your future payment tracks.

Block B: Report the value of your interest by marking the appropriate column.

Block C: Mark the column labeled “None (or less than $201)” because you have not yet received the variable lump sum payment.

Schedule C, Part II

You need to report continued participation in a deferred compensation plan in Schedule C, Part II. (Note: Do not report your spouse’s deferred compensation plan in Schedule C, Part II.)

Terms: Identify the plan as a deferred compensation plan and describe its terms in detail. Among other details, you need to state what you will receive and when you will receive it. You also need to state any deviations from the normal terms of the plan that the employer will make for you. This includes any acceleration of payment, any waiving of vesting requirements, and any change in the form or timing of payment or eligibility.

Parties: Provide the name of the employer as well as the city and state in which the employer is located.

Date: Provide the month and year in which you began participating in the plan.

Click Here for Frequently Asked Questions 

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.