JA

After additional research, I have a follow up to this original question. I'm now leaning to Answer A, but would like to hear if anyone has other references to support B. IRC 409A (a)(4)(C)(iii) states the requirement for 12 month prior to date of first scheduled payment is for a payment described under (2)(A)(iv), and IRC409A(a)(2)(A)(iv) is defined as a specified time (or pursuant to a fixed schedule) specified under the plan at the date of the deferral of such compensation. also IRC 409A-2(b)(iii) requires any election related to a payment described in 409A-3(a)(4), and 409A-3(a)(4) is "A time or fixed schedule specified under the plan in accordance with paragraph (i)(1) of the section. 409A-3(i)(1) Specified time or fixed schedule states the date must be nondiscretionary. It seems to me that because the payment is due to the separation from service, which is a discretionary date, then the election to change it must be done 12 months before they separate from service, thus the re-deferral 5 more years is not honored. The only other thought is that this subsequent change is considered a separate "deferral" and since they are aware of the approximate timing of when it will be paid, then they see it as a fixed/specified date. However, the participant doesn't have the date "scheduled" until the separation actually happens, and that separation is discretionary, thus I don't see how it's permissible. Curious to see what others think.

This is an unfunded nonqualified deferred compensation plan. each year the participant can elect to receive their distribution on a fixed date or retirement. if they separate from service prior to either event, they are paid as a lump sum. There is a vesting override for age of retirement.

Plan currently has a retirement age of 55. They allow installments if you are retirement age when you separate, otherwise lump sum. Sponsor wants to change the retirement age to 60. My question is, can that be done retroactively for all current participants? or must it only be allowed for new monies deferred after the amended change? It's not accelerating a payment and trying to track what and when someone is paid if they separate is going to be very cumbersome. I appreciate any thoughts on this.

I believe the answer to this question is going to be broader than I'd like it to be, however here goes. At the highest level, my question is "does a pending subsequent deferral election for a separation from service distribution event expire upon separation from service"? Example: The plan document allows for the following: Time of Distribution as a lump sum or annual installments either a) stated month and year; or b) following separation from service. For a separation from service, the payments commence the first of the month following the one-year anniversary of the date of separation of service. Participant submits a subsequent deferral election to change from lump sum to installments 1 month prior to separating from service. What's the right answer? A. Separation from service is the payment event, and since it is not a fixed date, the pending election is not honored. B. The plan does define when the payment would be made, so the participant knew the date would be over a year away, thus the subsequent election stays pending and becomes effective before the actual payment, at which time the payment schedule is pushed 5 years and changed to installments. I appreciate any thoughts on this, as well as items to consider if this might be a plan by plan decision.

I am curious as to any common or recommended disclosures that may be used with deferred compensation plans for participant quarterly statements or on web pages. I understand there are no "required" disclosures, but I recommend something that references that the investment shown are not an indication of ownership. Any thoughts on this? any suggested statements that you would use on statements or online?