post severance compensation

[k man]

per the plan document severance after separation from service is not compensation under the plan. however, what if as part of the severance agreement the employer is still paying the ee's health insurance. does that change anything? the termination date might be different.

[buckaroo]

K man,

I believe that the fact that the employer is still paying some of the benefits of a term'd ptp is irrelevant. If the person has truly terminated and they are receiving severance, it cannot be utilized for plan purposes. (I think it has to do with if the participant actually worked hours.) The only post severance comp which can be included is from a ptp’s last paycheck or unused sick/vacation. The only other issue has to do with commissions which are paid much later as well. If I recall correctly, if the ptp is permitted to defer out of them, then they can be counted as comp. I am a bit fuzzy with this so I will stop here as it isn’t what you were asking about. I hope this helps.