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Change in ESOP Distribution Schedule for Participant in Pay Status

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This is a follow up to my last post.  Can we change the distribution schedule for terminated participants?  Our SPD provides that any changes to the Distribution Policy apply to distributions occurring after the amendment, even if your employment terminated before the amendment to the policy.  Is this ok?  What about for participants in pay status?

For example, I terminate (not retirement, death, or disability) and the Policy says I get 5 annual installments beginning at the end of the year following my termination.  I receive two installments.  The Policy is changed to 5 annual installments beginning at the end of the 5th year following my termination.

How does the new policy apply to me?  Since I have already received 2 installments, do I then just get 3 installments beginning on the last day of the 5th year?  Or do I get 3 installments two years following the last day (i.e. I'm treated as having received the first two, so I just get the last 3)?  Or can we not change the payment schedule for people in pay status once the first installment has been paid?

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I know no one who thinks you can change it for people in pay status.  Most will cite 409(o)(1)(c) which requires ESOP payments to be substantially equal. 

You can get vigorous debates on people terminated and whose payments have not started.  It is clearly more aggressive.  Most people I know shy away from it and make the change to the policy to say something like:  This policy is for anyone who terminated after xx/xx/xxxx date.  I have however, seen change apply to terms not in pay status. 

I have never seen any clear ruling or cite for the terms not in pay status.  It is more of a risk tolerance thing as far as I can tell. 

I have to admit I have never seen an SDP warn people it could change after they terminate either.  Not sure if that boosts the case you can do it. 

I know you can search and find a thread on this board were a person was asking about a person who completed the form but the check hadn't been written.  That was cutting it real close!  (I believe I advised against it but I am going off memory.) 

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