Mark Whitelaw 4 Posted March 19, 2020 Report Share Posted March 19, 2020 Many companies are laying-off their workers temporarily to get them off their payroll and onto unemployment benefits. Expect this will trigger lump-sum termination distributions to a lot of participants - especially at companies that extended 409A plans to lower and middle management HCEs. Luke - Thoughts? Anything those employers can do? Thanks! Link to post Share on other sites
Mark Whitelaw 4 Posted March 26, 2020 Author Report Share Posted March 26, 2020 3.28 million jobless claims last week. Wow! Link to post Share on other sites
QDROphile 295 Posted March 26, 2020 Report Share Posted March 26, 2020 Lower and middle management HCEs = Select group? Link to post Share on other sites
Mark Whitelaw 4 Posted March 27, 2020 Author Report Share Posted March 27, 2020 Not saying that. Not the point. Expecting the most exposed 409A participants are those in lower management positions. Don't see 409A exceptions for being terminated and later rehired. Just curious if these people are SOL or not. Link to post Share on other sites
QDROphile 295 Posted March 27, 2020 Report Share Posted March 27, 2020 But your question presupposes that "lower management" has 409A compensation and my point is they should not have the problem in the first place because they should not have 409A compensation. l am just being unsympathetic. If these people are SOL, they never should have been in luck that they are now out of. Not their fault. Link to post Share on other sites
Mark Whitelaw 4 Posted March 27, 2020 Author Report Share Posted March 27, 2020 Agree 100% I see surveys showing companies extending 409A plans down to managers making $100,000 - $150,000. Common to see life insurance companies promote inducing managers making $125,000. WOW!!! Back when I was supporting NQDC we never included anyone that already wasn't in the maximum tax bracket. Otherwise, bracket creep exposure and would have been better just putting their after-tax paycheck in a no-load NQ Variable Annuity. Link to post Share on other sites
Luke Bailey 259 Posted April 9, 2020 Report Share Posted April 9, 2020 Apologize for tardy response. Catching up with BenefitsLink posts, Mark. Does your question go to the economic stress this puts on the employer as sponsor of an "unfunded" plan? The questions I have gotten from clients about 409A in the time of Covid-19 have all been related to contribution cessations and in-service distributions for participants who are still employed. Bottom line on pretty much all 409A issues right now, I think, is that neither Congress nor IRS has had the time or maybe interest to extend any special relief for 409A issues based on the Covid-19 emergency, even though many of the same issues as are applicable in the qualified plan area apply to 409A plans as well; the regulations are probably far more rigid than makes sense given the circumstances. But the individuals affected are a smaller, less distressed (on the whole) group, so no relief yet. Link to post Share on other sites
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