PTO Constructive Receipt

[IM4ERISA]

I have a client who allows its employees to make a choice about cashing out their PTO bank or accruing additional time.  This no doubt triggers the constructive receipt doctrine.  Is it possible to use a haircut provision of 10% as a "substantial limitation" to work around the constructive receipt issue?  I know that these provisions were common in deferred compensation arrangements pre-409A.  However, I don't believe the IRS ever explicitly accepted the haircut approach but after losing several court battles opted for a non-enforcement approach.  As such, I am inclined to advise them against using a haircut provision.  Any input would be appreciated.    

[Lois Baker]

Ran across this article just this morning; it may or may not be helpful:

https://www.employeebenefitslawblog.com/you-cant-touch-that-permitting-cashouts-of-pto-may-create-tax-traps-for-employees-and-employers/

[IM4ERISA]

Thank you!  This very helpful.