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MADISON, Wis. – CUNA Mutual Group said it’s ready to assist credit unions up to and beyond the time the IRS provides more guidance on non-qualified deferred compensation plans. In an April 9, 2004 private letter ruling, IRS responded to a FCU’s inquiry about establishing a non-qualified deferred compensation plan and whether Section 457 of the Internal Revenue Code (IRC) applied to such a plan. In its response, the IRS determined that the federal credit union was a “federal governmental instrumentality” and, therefore, is not an eligible employer. As a result, the IRS concluded that the credit union could not offer a Section 457 plan. The IRS has said guidance, which was expected to come this summer, could actually come by September. CUNA Mutual, along with CUNA and NAFCU have been in contact with IRS officials since last spring providing feedback to the agency on any guidance it will provide. Credit unions can e-mail questions to their CUNA Mutual representatives or contact them at (800) 333-2644 to consult on current plans or establishing new ones.

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