Vesting upon Change in Control

[austin3515]

Deferred comp plan provides that benefits accrued will vest based on a rolling vesting schedule.  The sponsor and the Participants want the money to become vested if the sponsor is bought.  Any words of advice and/or caution? 

[XTitan]

Acceleration of vesting is not a problem under 409A.

[CuseFan]

Vesting would trigger application of payroll taxes, unless you have a DB SERP formula with a pension offset where the present value cannot currently be reasonably  ascertained.

[austin3515]

Thank you, I'm vesting and paying out on essentially the same day.  Good point though!

[Bob the Swimmer]

AUSTIN---

I think if I were the participant, I'd want a rabbi trust to protect my account balance against change of heart or change of control by the employer

because a new employer could try to renege on the agreement to pay out. Others may feel differently.

BOB