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409A - Is a change in installment calculation method a change in time or form of payment?

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When participants in a deferred comp plan elect to receive installments over 5, 10, 15 or 20 years, they have been permitted to choose whether those installments will be calculated using a "Level Payment Method" or "Percentage of Retirement Account Method."  Where a participant wants to change from one calculation method to the other without changing either the commencement date of the installments or the number of years over which the installments will be paid, does anyone think 409A's usual rules about changes in time and form of payment -- including the 5-year delay -- would need to be observed?  

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I would say you do need to observe the 5 year delay, since at the time of deferral you would not have a single objective, non-discretionary formula to calculate payments. 

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One of these (most likely the percentage method, unless the percentages increase over time) is going to result in an acceleration, the other in a deferral. The former is generally a violation of 409A, the latter typically is OK if, as Xtitan points out, you comply with the 5-year rule. The analysis will also be affected by whether the plan says that the entire installment scheme is one payment, or each installment is a payment.

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