Benefits Other Than Retirement Benefits

[Guest Day Erisa72]

I have read several strings that generally allude to the provision of severance benefits through a qualified defined benefit plan. I am curious as to how these benefits are structured given the prohibitions of IRS Reg. 1.401-1(b)(1)(i) and the discussion in GCM 39869. Are the severance benefits discussed truly severance benefits, i.e., temporary benefits (for example, a % of pay for 6 or 12 months following termination) that end prior to retirement which cannot be characterized as a social security supplement? Any thoughts would be greatly appreciated.

[david rigby]

No expert I, but that won't dissuade me from having an opinion.

- It may be important to clarify terminology. GCM 39869 is related to "shut-down" benefits, which may not convey the same meaning as "severance" benefits.

- Don't overlook the word "primarily" in the regulation cited.