QSERP Question

[Guest CKING1]

We are considering rolling a QSERP into our DB plan to help rectify disparities created by the $210,000 maximum compensation cap. However, it appears that we would have to list each HCE out by name and perhaps even list his or her new additional benefit alloted due to removing the compensation cap. Is this true? Do you have to spell it out that way in the Plan document and/or appendix. We don't publicize salary ranges for executivie positions. Any way around this?

[david rigby]

Perhaps I don't understand your phrasing. Are you creating a new SERP? And does the qualified DB plan already exist? Do the SERP participants already participate in the DB plan? Do you want the SERP to be a vehicle to "make-up" for the 401(a)(17) limit? Or perhaps it already does that and you want it to do something different?

[Guest Harry O]

I wouldn't add a QSERP until you see how the final 409A regs come out. The IRS could take the position that adding the QSERP effectively accelerates a distribution from the NQ plan to the qualified plan. I'm not saying that this is the right answer but it could be an answer.

[GBurns]

What was the original purpose of the SERP? I thought that many, if not most, SERPs were installed to rectify or compensate for this disparity?

How would "rolling" (if it can be done even aside from Harry O's warning) rectify the disparity etc? How would "rolling" remove the "compensation cap" or avoid the 401 limit?

Maybe I am also just not understanding your phrasing.

[AndyH]

I have a situation that might call for a QSERP, most likely as one flat dollar amount added to one person's accrued benefit by an appendix to a document. No SERP currently exists.

Are there 409A concerns? Other concerns (other than general testing and PR)?