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457b top hat SWO's


30Rock

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Can a top hat plan participant change the dollar amount of his installment payments? I am not sure if they are being made monthly, quarterly or annual. Does it matter if the formula is life expectancy or a dollar amount or account balance based? The document does not have any language concerning this.

Thanks!

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IRREVOCABLE PAYMENT DEFERRAL ELECTION - Amounts are generally taxable to an individual when paid or made available to the individual. A plan may provide for payments to commence on any date that is on or after the date on which the participant severs employment, but no later than the date required under the minimum distribution rules of Code §401(a)(9). A plan may allow participants, prior to the plan's payout date, to irrevocably elect to defer such payment at a later date without such amount considered "made available". Such election must set a fixed and determinable date in the future on whcih benefits will commence. A plan may allow participants to change an election at any time up to the plan's payout date. However, the most current deferral election in effect on the payout date will govern.

A plan may allow participants an opportunity to make one additional deferral election after the first permissible payout date so long as the additional election is made prior to the commencement of benefits udner the original or "first" deferral election. An additional deferral election may be made only if the election defers the commencment of benefits to a date later than the original commencement date specified under the first deferral election. The following examples illustrate the rules governing additional deferral elections:

Example A - A plan provides that payment will be made in a lump sum 90 days after a participant separates from service. The plan also provides that, during a 30-day "window" or election period immediately following separation from service, the participant may elect to defer payment commencement to a later date or may elect payment in the form of 10 annual installments to begin 90 days after separation or at a later date. A participant who has separated from service at age 50 elects, within the election period, to have payments made in the form of 10 annual installments and to defer commencment to age 55.

Exampe B - Same facts as Example A, except the participant later makes, with the election period, a new election to defer these payments to age 60. The section election is not the "additional" election discussed above, but merely the governing "first" election to defer as it was made before the close of the plan's election period.

Example C - Same facts as Example B, the participant at age 59, some nine years after separation from service and the first permissible payout date under the plan, elects to further defer paymetn commencement from age 60 to age 65. This election would be the one additional deferral election allowed under the rules. This additional deferral election may be made as it precedes the commencment of benefits under the first deferral election.

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