Grandfathered Amount - Deferrals Always Vested

[Christine Roberts]

Deferred Compensation plan put in place in 1995 provides that all salary deferrals are 100% vested at all times and eligible for distribution in lump sum or installments "as of January 1 of the year(s) specified in the Participant's applicable Participant Enrollment Form."

Some participants designated payment dates in this fashion; most did not.

For this latter group, is the "grandfathered amount" - the amount that is earned and vested as of December 31, 2004 - all salary deferrals as of December 31, 2004, plus earnings thereon? Or can it be said that, in the absence of a specified distribution date, distribution is impliedly conditioned upon employment until the first to occur of death, disability, or separation from service?

Any and all comments appreciated.

[QDROphile]

As of December 31, 2004, or any time prior to that, at what time were the amounts distributable for a participant who had not designated a year in the election?

[Christine Roberts]

As of December 31, 2004, or any time prior to that, at what time were the amounts distributable for a participant who had not designated a year in the election?

Hi QDROphile thanks for responding. Without stating a default distribution date or event the original plan provides that accounts become fully vested (employer $$) and payable on death, disability, termination of employment or hardship.

[QDROphile]

The plan has to answer the question, even if the plan terms on the page do not provide the answer. If it cannot answer the question, then it could have failed under the "old" constructive receipt rules and you don't have anything to grandfather.

[Christine Roberts]

As of December 31, 2004, or any time prior to that, at what time were the amounts distributable for a participant who had not designated a year in the election?

Hi QDROphile thanks for responding. Without stating a default distribution date or event the original plan provides that accounts become fully vested (employer $$) and payable on death, disability, termination of employment or hardship.

Precisely my concern. I interpret use of the term "payable" in express conjunction with death, disability, termination of employment as limiting distribution to these events in the absence of a stated date certain.