No Special Deals for Executives Act of 2006

H.R. 4884, the No Special Deals for Executives Act of 2006, proposes a change to the tax code regarding executive compensation when a company’s employee pension plan is underfunded. Under this bill, if a company’s defined benefit pension plan falls below an 80% funding level, executives would be required to report their deferred compensation—such as bonuses or pay set aside for the future—as immediate taxable income.

The practical impact of this legislation is to link the financial security of corporate executives to the health of the general workforce's retirement fund. By removing the tax advantages of executive "nest eggs" when a company fails to adequately fund its employees' pensions, the bill aims to encourage corporate leadership to prioritize the stability of the broader pension system.