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You'll NEVER hear me object to it Rule number one, RTFD (Read The F...antastic Document)

Good one, Austin. Wondering if that would make him Darth 401king? or does that Carrie (RIP) this joke too far far away?

Princess, the key word you used, which the IRS has discussed as well, is that it is "treated" as earned. IT is not actually earned. By my clock you still have 3 days to eliminate the last day rule. But remember, amendments must satisfy nondiscrimination so if the only one to benefit is the partner, then (assuming he is an HCE?) you are outa luck. P.S. Is 401king your father? Ha ha ha

Are any of the owners related in any way?

We used Datair documents back then. You might try contacting them.

We're a law firm and have a TRA '86 prototype we'd be willing to sell to your client

To determine whether something is a participant loan that might meet conditions for ERISA's statutory prohibited-transaction exemption: "The existence of a participant loan or participant loan program will be determined upon consideration of all relevant facts and circumstances. Thus, for example, the mere presence of a loan document appearing to satisfy the requirements of section 408(b)(1) will not be dispositive of whether a participant loan exists where the subsequent administration of the loan indicates that the parties to the loan agreement did not intend the loan to be repaid." http://www.ecfr.gov/cgi-bin/text-idx?SID=e3a3147a70d22f29bb42e4675a67fe47&mc=true&node=se29.9.2550_1408b_61&rgn=div8

Once again if the plan administrator has reason to believe the loan isn't going to be paid back the loan can't be issued. The rules are clear the loan has to be issued on terms that are commercially available any commercial bank would only give a loan that is expected to be paid back. Strictly speaking is there a way to do what this person wants to do? Sure if you are willing to play in the grey areas and ignore things like is this a sham termination or a sham loan. But you could very easily get all the right paperwork. Even have a few loan payments be made from this person (The loan would have to not require payroll deduction payments.) and the chances are you won't get caught. But if the question is will I get caught don't bother asking here just do it. If the question is there a risk free way to do this then the answer is "no".

FWIW, having it spelled out in the Plan Doc would be best, but I would not have a problem calling this "extra vacation pay" earned on the day before termination, or something similar, if future terminating employees are offered the same deal, to avoid discrimination charges. The employer may also wish to look into how it affects other benefits. For example, if the DOT is out 2 weeks (with the employee not required to show up during those 2 weeks), is the employment extended into the next month, and is the employer then required under ACA to offer medical coverage for another month? and like that.

Electronic delivery will be less of an issue as more people in my generation (ancients and pre-historics) retire. A majority in these groups are computer literate enough to check e-mails, etc., but a meaningful minority cannot or will not make using the computer a routine function in their work day.

The fact that the employee has suggested the term/rehire fraud now prevents an innocent term/rehire, wink, wink, nod, nod.

Because you left off this part of the rules: (A) Except as provided in paragraph ©(2)(ii) (B) of this section, has affirmatively consented, in electronic or non-electronic form, to receiving documents through electronic media and has not withdrawn such consent; I have never seen any place that gets 100% of their people to consent. So you are either forced to send paper to everyone or make two groups. Now I have a client that has over 17k employees. For them the savings in postage is enough to go through the cost of making two groups of data and delivering one set electronically and one set by paper. I am not sure where that line is but most of my clients that has 2k or less in total employees seem to think just sending out paper to everyone is just as easy and cost effective. As for your various groups. Most of my clients that have employees who aren't "desk jobs" (think factory workers or your cleaning lady) feel uncomfortable with the idea those people have true access to e-mail and don't do it. For my clients that are like my engineering firms (where everyone has a desk job and pretty good with computers) the reason goes back to my first comment. Enough of them will not consent so they stick to paper.