"LEO" Plan??

[Guest CJK]

The plan sponsor is a law firm. Currently the law firm sponsors two qualified retirement plans, one plan for Senior Counsel and another for staff and associates. The plan sponsor indicated that they are looking to add another plan for the Senior Counsel that they called a "LEO" plan. The plan sponsor indicated that this plan was "created" by PriceWaterhouseCoopers. Does anyone know anything about this so called "LEO" plan?

[IRC401]

I assume from the fact that you posted the quesiton on the NQDC board that the LEO plan is a nonqualified plan.

Nonqualified plans are always dangerous for law firms because they shift tax liabilities from some partners to others and make the Firm less attractive to younger attorneys.

I am going to make a wild guess that LEO stands for "leveraged executive option" and is equivalent to Deloitte's Keysop or E&Y's Option-It (and I don't know what KPMG calls theirs). Let me know if my guess is in the ballpark.

[Guest EAKarno]

For the record, KPMG calls the idea FlexOp. This appears, however, to be something different. Our sources indicate that LEO stands for Lawfirm Equity Option, or something very similar. Apparently it is an idea promoted by PWC to allow law firm members at diffrent compensation levels to contribute at different levels. We're not sure it is even a nonqualified arrangement based upon the scant information received.

[IRC401]

Gee, is it possible that PWC figured out how to do an age-weighted 401(a)(4) general test and is selling it as "LEO" to law firms?

[Guest EAKarno]

That was my guess.

[actuarysmith]

Ditto. That was my guess also - it is nothing more fancy than a new comp plan aimed at law firms.

It's all in the marketing! .................

[Guest wmacdonald]

This "LEO" plan sounds like a QSERP. IF it is, see www.crgworld.com and you will find a manuscript from our monthly chats.

William L. MacDonald

President & CEO

Clark Bardes Consulting/CRG