Grassroots Still Urged Against Bingaman Amendment
Senator Jeff Bingaman (D-NM) filed, as we expected, his harsh attack on COLI, as a possible amendment to the Senate Finance Committee proposed economic growth package. With that package being marked up today and tomorrow, we continue to urge grassroots opposition to the amendment, using the talking points, sample letter and sample email we provided yesterday.
The Senate Finance Committee growth package proposal that is being marked up today did not include a provision to eliminate the grandfathering of pre-’86 COLI policies that was recommended by the Joint Committee on Taxation Enron Report. AALU & NAIFA, as you know submitted a statement to the Senate Finance Committee strongly opposing the elimination of the pre-’86 grandfather provision.
Nonqualified Deferred Compensation
Attached is the Joint Committee on Taxation staff's discussion of the nonqualified deferred compensation provision included in Chairman Charles Grassley's (R-IA) mark of the tax bill now being considered by the Senate Finance Committee.
The proposal restricts distributions to certain specified times or events (separation from service, death, disability, specified time, change in control, or financial hardship), does not generally prohibit the use of rabbi trusts (although offshore rabbi trusts would be prohibited), and does not restrict investment decisions by participants. The proposal does restrict the use of trusts where the deferred compensation becomes secured against the employer's creditors upon a change in the employer's financial health.
Statutory language for the proposal is not yet available. The Joint Committee on Taxation has scored the provision as raising $971 million over the ten-year revenue estimating window.
<<Excerpts from Joint Committee on Taxation staff description of NQP provision of Senate Fiance Committee Proposed Growth Package.doc>>