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Split Dollar - Amend for some participants but not all


Guest Benefitsrock

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Guest Benefitsrock

We materially modified a split dollar plan (that was effective before the effective date of the final split dollar regulations, 9/17/03) with respect to some participants but not all participants. It is clear which participants are affected by the amendment (assume they are identified by name).

Is the entire split dollar plan considered "materially modified" for purposes of the final split dollar regulations or are only the identified participants affected by the material modification subject to the final split dollar regulations? I am leaning towards concluding the entire plan is materially modified for purposes of the final regulations but I haven't found any guidance.

Does anyone have any thoughts? Thanks in advance!

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Without studying it, I would think it's on a individual by individual basis. Look at the precise words of the "material modification" provision of the effective date rule near the end of the 1.61-22 regulation, then look at the definition of "split dollar arrangement" near the very beginning of the regulation.

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  • 2 weeks later...
Guest EXB 1
We materially modified a split dollar plan (that was effective before the effective date of the final split dollar regulations, 9/17/03) with respect to some participants but not all participants. It is clear which participants are affected by the amendment (assume they are identified by name).

Is the entire split dollar plan considered "materially modified" for purposes of the final split dollar regulations or are only the identified participants affected by the material modification subject to the final split dollar regulations? I am leaning towards concluding the entire plan is materially modified for purposes of the final regulations but I haven't found any guidance.

Does anyone have any thoughts? Thanks in advance!

The entire split dollar plan is not affected, it is based on the individual split dollar agreements. A material modification only occured for the participants that had a split dollar amendment. The other participants should still be grandfathered under the split dollar regs. We have several clients where only a portion of participants are grandfathered.

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