Plan obligation to allow distribution election changes per 409A

[Guest strap hanger]

I contributed to Compay A's Def Comp plan for approx 5 years. At that time Company A spun off the operation I was associated with and the Def Comp balance and liability for payment shifted to the new Company B. This company put in place an identical Def Comp plan to the parent CoA (seamless transition) and I continued contributions of salary and annual bonus for another 5 years to Company B.

Company B suspended the Plan at year end 2005 due to concerns over 409a.

Over the last 3 years both Company A and B have slid from investment grade to junk.

My investment elections ( non changeable) were for 10 equal installments after retirement.

Realizing the risk to my "savings" from potential bankruptcy of Company B I have requested that the plan Administrator ammend the plan as allowed (I think) by the Transition regulations for 409a to allow a one time change in the payout election schedule. This was done by registered letter to the Company B legal address.

FWIW I am currently eleigible for retirement and expect to do so in the next 6-12 months.

So far, I feel am being stone walled by the bureaucracy. This is a large company and they have little incentive to "do" anything other than ignore me. My intuition is that the functionaries inside the Company finance dept could care less about the jeopardy of plan participants and would prefer to run out the clock rather than actually act on my request. I have sent registered letters and email notes and solicited the intervention of HR, but so far all the response I have gotten is that the Company is "studying" the impact of 409A and if there are any changes to the plan I will be notified.

MY QUESTION IS... in these circumstances does the Plan Administrator have any fiduciary or other legal or ethical obligation to consider my request that I can appeal to in an effort to get the plan ammended?

Thanks for your time!

[QDROphile]

The company has no obligation to design or change a deferred compenstion plan to fit your desires.

[jpod]

Depending upon the amount involved, and your ability to pay attorneys fees, you may wish to consider hiring an experienced securities lawyer to investigate whether the Company(ies) complied with applicable state and federal securities registration requirements or exemptions from those requirements and to advise you of your rights if the Company(ies) did not comply with same.

[Guest Harry O]

You should get a copy of the plan document. If this is a public company the plan was probably filed as an Exhibit to some prior 10Q or 10K available on the SEC's website. If you can't find it there, get a copy from HR.

Next, check to see if the plan permits immediate withdrawals of all money if you agree to forfeit a percentage of your balance (typically 10%). This is no longer possible for money vested after 12/31/04 but was not an uncommon feature for many plans before this date. Yes, you give up 10% of your funds but that is better than giving up 100% if the company taps out.

If the plan doesn't have such a feature, you are probably out of luck.

[namealreadyinuse]

Why should you get paid before other creditors anyway?

This is exactly how the tax laws are supposed to work.