Waiver / Acceleration of a Condition to Deferred Comp.

[Guest Eric A]

NQDC plan permits payment upon death, disability, and separation from service. If a participant dies, becomes disabled, or has a separation from service on or after attaining age 65, the plan pays a “Big Benefit.” If a participant has a separation from service on or after attaining age 58, but before attaining age 65, the plan pays a “Little Benefit.” If a participant has a separation from service before attaining age 58, the plan pays no benefit.

Client would like to reduce the age required for a participant to receive the Big Benefit down from age 65 to age 62.

I conclude that lowering this age requirement constitutes a service providers waiver/acceleration of a condition to deferred compensation described under 1.409A-3(j)(1), which would not violate the anti-acceleration rules of 409A.

Based upon these limited fact, does anyone agree, disagree, or have any additional thoughts? All comments are appreciated! Thank you.

[jpod]

I don't think it is even that sophisticated. I think you are simply increasing the benefit at age 62.