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The question pertained only to the extra year kicker, so that's all I answered, but Luke's points are well taken.

The payment conditions (quit for good reason or involuntary term w/o cause) meet the separation pay exception, but that only covers payments of up to 2x 401(a)(17) amount (so $560,000). The rest (either $40k or $600k, or possibly much more because of bonus) is not within the exception, so treated as a 409A plan. The issue is not exactly potential for manipulation, but whether the payments with respect to each year have fixed payment dates. Also, if public company make sure to comply with 6-month rule for amounts not fitting within separation pay exception.

Old rule. Currently, Appendix A, .05(10) states that for purposes of .05(8) and.05(9) - which are the reduced correction items - an "Employee Elective Deferral Failure" includes failure to implement..."an affirmative election..."

I don't see any. There is no issue of manipulation of the timing of any payments here.

I wonder...even if a document failed to have language such as Austin and Kevin mentioned - if you failed 414(s) testing and just operationally used full comp - if most auditors would ever pick this up. I'm obviously not recommending avoiding proper "form" in the document language, or corrective amendments if necessary, etc. - just musing...