118 STAT. 1637 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(B) INITIAL DEFERRAL DECISION.— ‘‘(i) IN GENERAL.—The requirements of this subparagraph are met if the plan provides that com pensation for services performed during a taxable year may be deferred at the participant’s election only if the election to defer such compensation is made not later than the close of the preceding taxable year or at such other time as provided in regulations. ‘‘(ii) FIRST YEAR OF ELIGIBILITY.—In the case of the first year in which a participant becomes eligible to participate in the plan, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date the partici pant becomes eligible to participate in such plan. ‘‘(iii) PERFORMANCE BASED COMPENSATION.—In the case of any performance based compensation based on services performed over a period of at least 12 months, such election may be made no later than 6 months before the end of the period. ‘‘(C) CHANGES IN TIME AND FORM OF DISTRIBUTION.— The requirements of this subparagraph are met if, in the case of a plan which permits under a subsequent election a delay in a payment or a change in the form of payment— ‘‘(i) the plan requires that such election may not take effect until at least 12 months after the date on which the election is made, ‘‘(ii) in the case of an election related to a payment not described in clause (ii), (iii), or (vi) of paragraph (2)(A), the plan requires that the first payment with respect to which such election is made be deferred for a period of not less than 5 years from the date such payment would otherwise have been made, and ‘‘(iii) the plan requires that any election related to a payment described in paragraph (2)(A)(iv) may not be made less than 12 months prior to the date of the first scheduled payment under such paragraph. ‘‘(b) RULES RELATING TO FUNDING.— ‘‘(1) OFFSHORE PROPERTY IN A TRUST.—In the case of assets set aside (directly or indirectly) in a trust (or other arrangement determined by the Secretary) for purposes of paying deferred compensation under a nonqualified deferred compensation plan, for purposes of section 83 such assets shall be treated as property transferred in connection with the performance of services whether or not such assets are available to satisfy claims of general creditors— ‘‘(A) at the time set aside if such assets (or such trust or other arrangement) are located outside of the United States, or ‘‘(B) at the time transferred if such assets (or such trust or other arrangement) are subsequently transferred outside of the United States. This paragraph shall not apply to assets located in a foreign jurisdiction if substantially all of the services to which the nonqualified deferred compensation relates are performed in such jurisdiction. ‘‘(2) EMPLOYER’S FINANCIAL HEALTH.—In the case of com pensation deferred under a nonqualified deferred compensation Deadline.
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