Phantom Stock

[alexa]

Has anyone used phantom stock as an employer matching contribution?

If so, any restrictions.

Advantages? Disadvantages

Thanks

Alexa

[Jim Chad]

I think it would have to be "top hat only". But I'm guessing here.

[alexa]

I think it would have to be "top hat only". But I'm guessing here.

We are looking to do this for all employees. I was just reading an article from Bloomberg that SAP is offering phantom stock to its employees

[K2retire]

Offering phantom stock to employees as an investment option is different than the employer making the contribution in phantom stock.

[jpod]

Alexa, please elaborate. If you mean allocating phantom stock to employees based on their elective deferrals to a qualified plan, doesn't that violate the "contingent benefits" prohibition? If you mean actually putting "phantom stock" into the 401(k) as a match, that's impossible.

[alexa]

Alexa, please elaborate. If you mean allocating phantom stock to employees based on their elective deferrals to a qualified plan, doesn't that violate the "contingent benefits" prohibition? If you mean actually putting "phantom stock" into the 401(k) as a match, that's impossible.

To match an employee's deferral- yes

Please elaborate on the "contingent benefits prohibition- I'm nto quite familar with the details of that

Why would contributing phantom stock be impossible. I've seen plans that have in-kind contributions

Thx

Lexy

[jpod]

1. See Treas. Reg. Section 1.401(k)-1(e)(6).

2. Because it's not "real;" it doesn't exist, i.e., it is "phantom." If what you mean is that the employer intends to put into the plan as a match an i.o.u. that is intended to function as phantom stock, that would be a prohibited transaction.