409A

[Guest RJW]

Can severance payments payable due to a voluntary severance comply with 409A or does the fact that the employee can acess the payment at any time by quitting result in an impermissible acceleration or deferral of the payment date?

[Guest L337pwner5]

Payments on voluntary separation from service can comply with 409A, but you won't be able to take advantage of the exemption from 409A for separation pay plans. See 1.409A-3(a)(1) (separation from service as a permissible payment event) and 1.409A-1(b)(9) (exemption for separation pay plans that meet certain requirements).

So in response to the first part of your question, yes, and in response to the second part, no. But you do have to comply with all of the plan document, election, form of payment, etc. requirements under 409A, or find an exemption other than 1.409A-1(b)(9) to rely on.

[Chaz]

. . . and you have to comply with the six-month hold-out requirement for "specified employees."

[Guest L337pwner5]

. . . if the company is publicly traded.

[Chaz]

. . . if the company is publicly traded.

. . . nicely clarified.