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Showing results for tags 'severance pay plan'.
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My question relates to 29 CFR 2510.3-2(b) Severance Pay Plans The Regulations state "the total amount of such payments does not exceed the equivalent of twice the employee's annual compensation during the year immediately preceding the termination of his service." What does the phrase "the equivalent of" mean? Is the DOL referring to the time value of money? Additionally, in referring to the annual compensation, how is that determined? Is the annual compensation the employees previous years salary or is it the salary it would have been if he had continued working? Essentially I'm asking if anyone knows what they mean by "usual rate of compensation". Any thoughts? Thank you!
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My understanding that a severance pay plan that is filed as a welfare plan need only complete Form 5500. Schedule As are not required since there are no insurance providers. Schedule C and Schedule H are also not required. The severance plan assets, in this plan, remain a part of the general assets of the company (no Trust). My question is: Is a Summary Annual Report required to be distributed to employees or would a severance plan be exempt from the SAR? Since there are no Schedule As, Schedule C, Schedule H, the financial information would not flow through to a SAR which would make it appear inaccurate. Thank You
