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I think you are missing the point here - the question/issue is severance pay not post-severance compensation. The person is no longer employed and severance pay (per IRS) is never plan compensation.

Thank you! And I'd love to have BenefitsLink take over that page. I've e-mailed you with information. Thanks, Bill! This is definitely bittersweet for me. I've been practicing employee benefits law for 46 years now, and maintaining my site for 28, and it's hard to walk away from all that. But I am 72, and it's time for a new chapter in my life. I've been accepted as a volunteer EMT trainee with a local fire department. That will be about a year of classes, practical training, and helping out the EMTs, after which I'll be certified as an EMT myself. Some questions have been raised as to whether I actually understand the meaning of "retire," which I hear is supposed to mean relaxing and playing golf or something. But I'm excited about the new challenges.

I have now retired, and will no longer be updating my site. So for all of you who have been relying on my maximum benefits and contributions page for historical limits, it is unlikely I will be updating it and I may take it down at some point. However, I do have the database with all the limits back to 1996. If anyone wants it so that they can develop their own page, let me know.

It is hard to guess what is their motivation. The owner's logic may be similar to someone who has excessive tax withholding during the year because they like getting a big refund when they file their taxes. This owner at least gets a little bit of earnings included in the refund while the IRS doesn't provide earnings on a refund of excess withholding. Maybe, the owner treats the family to a Disney vacation every year after the refund check arrives and the owner doesn't want to break the tradition.

Congrats on retirement. I would assume most people on a forum like this know about this IRS table with all the limits going back 1989. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.irs.gov/pub/irs-tege/cola-table.pdf

Happy retirement! I know I have a printoff of yours at least 20 years and four jobs ago detailing which Code sections don't apply to government plans, it's been a fantastic resource to have!

Hi Carol -- We'd love to have the database and create a page on BenefitsLink, with credit to you. Let me know how I can get it and make it easy for you. What is this retirement thing of which you speak? I thought it was only mythology 🙂 CONGRATULATIONS!

Just to add a note regarding this issue of merging plans (while sympathizing with everyone's frustration in M&A situations when the M&A attorneys ignore retirement plan implications): when you are trying to merge two 401(k) plans mid-year, you have to consider that the merger acts as an amendment to the plans. So, if you have a SH nonelective plan and a SH match plan and want to merge them mid-year, you must realize that the impact of that is to change one of the plans mid-year from one type of SH to another type of SH, which is expressly prohibited under Notice 2016-16. Similarly, if you have a non-SH plan and a SH plan and you merge them mid-year, either the non-SH plan is being amended mid-year to add a SH provision OR the SH plan is being merged mid-year to terminate a SH provision. Either way, you must conform to the rules of Notice 2016-16, as augmented by the SECURE ability to do a mid-year adoption of a SH plan under certain circumstances. So, beware of mid-year mergers. Better to wait until year end, freeze the acquired plan as of year-end, have the acquired employees enter the buyer's plan as of the beginning of the year, and merge the plans either concurrently or ASAP after that takes place. Also, in re the coverage issue raised, remember that you likely have the transition period under 410(b) unless you amend the plans in the meantime.

I'll never understand why M&A attorneys aren't sued for ignoring retirement plan issues prior to the transaction date.