The Senate Finance Committee on Wednesday approved a $1 million annual limit on what many highly paid executives can place tax-free into a deferred compensation plan and made it more difficult for individuals to protect their compensation from creditors in a bankruptcy.

In response to the Enron Corp. and WorldCom scandals, the new law restricts the flexibility executives have in controlling distributions from deferred compensation plans and restricts nonqualified deferred compensation plans, said Senate Finance Committee ranking member Chuck Grassley.

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