Written Plan Documents for 409A

[Guest IRISH79]

For a new plan effective in 2006, that has operated in good faith compliance with the statute and regulatory guidance issued to date, is a written plan required now or can we still wait until final regulations are released to draft document?

[Guest Joshua]

For a new plan effective in 2006, that has operated in good faith compliance with the statute and regulatory guidance issued to date, is a written plan required now or can we still wait until final regulations are released to draft document?

I should think that the proper approach for a new 409A plan created AFTER the effective date of 409A is to create a written plan document that is in "good faith" compliance in so far as there was/is guidance to do so during this transition period. Of course, the document will likely need language "tweaking" before 01/01/2008 once final regulations are available to consider. Based upon comments made, there is some reason to believe that the IRS will reduce some of the detail requirements of a plan document in proper "form", but not the basic requirement for some kind of written document.

Of course, no one knew that a written plan document was required under 409A until the first set of regulations was formally issued in the Federal register on October 4, 2005, although I suspect that most of us inferred it long before.

[namealreadyinuse]

There has to be a legally binding agreement to have 409A comp anyway. That means a writing usually. You should have all material terms and conditions written down. Most of these are ERISA (top-hat) plans anyway, and you need a written plan for that, don't you.