SPECIALIZED STRATEGIES FOR TAX-EXEMPT ORGANIZATIONS
Efficiencies for Highly Compensated Employees that preserve your institution's competitiveness, control, and privacy.
NEW THREATS TO COMPETITIVE COMPENSATION
Maintaining quality programs in an increasingly-competitive environment has long been a challenge for tax-exempt institutions. Adding to the challenge, The Tax Cuts and Jobs Act (TCJA) of 2017 added IRC § 4960, which imposes a new 21% excise tax on employees making more than $1,000,000 per year in total compensation.
The new law took effect December 31, 2017, and institutions such as universities will need to take into consideration their covered employees for the 2016 tax year as well. While the tax is based only on the organization's top five highest earners, the impact for some institutions may lead to millions of dollars in additional tax.
Appropriately designed non-qualified, deferred compensation plans are examples of proven, conservative strategies that can create tax-efficient solutions for highly compensated employees. These strategies would also allow the universities to have more control over their compensation packages, without relying on third-parties who may not always instinctively have the university’s best interest at heart.
Organizations need counsel from qualified tax and insurance planning specialists who can help them maintain control to build a scalable, enduring compensation model that gives them a winning and competitive strategy to remain ahead of IRC § 4960.
Complex outcomes require complex coordination and specialized knowledge. Within Pacific Advisors, our advanced financial specialists provide significant efficiencies for highly compensated individuals and their institutions.
With a history going back to 1862, our firm currently has over 46,000 clients (including more than 10,000 business owners). We have the teams and experience needed to help you to determine a effective approach to achieve your advanced objectives.
REQUEST A 30 MINUTE CONVERSATION
Set up a no-obligation call with one of our advanced financial specialists to learn more and see how these strategies may help your situation.