Termination with cause as involuntary?

[Guest CABatty]

In a previous thread, "cause" as a substantial risk of forfeiture was debated extensively, and I'm not trying to rehash that question. My question is, would a termination by the employer for cause be considered involuntary for purposes of the separation pay plan exemption? The question arises because the SRF rules qualify the phrase "involuntary termination" with the phrase "without cause," but the separation pay exemption rules do not use the qualifying phrase "without cause" in connection with "involuntary termination." Considering the thoroughness of the regs, it seems to me that leaving the phrase out was not an oversight and an involuntary termination with cause may qualify for the execption.

Any thoughts / comments?

[Steelerfan]

I would guess that it could be. My understanding of the IRS position is that a termination for cause (1) cannot create an SRF and (2) cannot be a 409A payment event. At least one prominent attorney is advising clients to remove such clauses from plans subject to 409A. But neither of these two situations occurs in the case of a separation pay plan, as long as you aren't relying on the STD exception and are otherwise within the 2 year/2x rule. I wish they would clarify this.