FACTS: ABC, Inc. has sponsored a 401(k)plan since 1987 which allows immediate payment to pre-retirement age terminees. They want to amend the plan to delay payment (other than rollouts) for two years after termination of employment.
Since 411d6 protects the timing of the benefits, they want to make the delay effective for the increase in benefits after 6/30/2000 from both contributions and investment gains. For example, Joe has an account balance of $10,000 on 6/30/2000 and terminates employment at age 40 in 2006 when his account balance is $50,000.
ISSUE: Can payment to Joe in 2006 be limited to $10,000? Or must it include the allocable investment gain from 6/30/2000 to 6/30/2006?
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