Interpretation of CIC provision

Nonqualified Deferred Comp Plan provides for payment on the later of attainment of age 70 or separation from service following age 70 (installments).  Also provides for payment in the event of a "CIC followed within 12 months by a separation from service, irrespective of age (lump sum)."  

Based on that language, what happens with an individual who is under age 70 and has already separated from service at the time of a CIC?  There is not a separation from service  in the 12 months following the CIC, because the individual has already separated. I believe the intent was to pay out the benefits upon a CIC in this situation, but am uncertain whether the plan language supports that interpretation. 

Thoughts?

6 minutes ago, kmhaab said:

"CIC followed within 12 months by a separation from service, irrespective of age (lump sum)."

Is the above the exact language? If so, the above requires the separation from service to occur with 12 months following the CIC. The separation of service for this employee happened prior to the CIC. The participant is entitled to a distribution at age 70. 

8 minutes ago, kmhaab said:

I believe the intent was to pay out the benefits upon a CIC in this situation, but am uncertain whether the plan language supports that interpretation. 

No it was not. The intent of these provisions is to protect executives who lose their employment because of the CIC, which is quite common.

I might add to Former Esq.'s good points that, in our practice, we typically utilize Good 
Reason termination by the individual in CIC situations---the rationale for this provision is many employers don't necessarily want to pay someone who leaves voluntarily but was not "pushed out" or made to accept a lower position or pay/benefits package or relocation of a certain distance from the office----and we use 2 years within that provision. It looks like the intent here is to simply focus on paying at age 70 or CIC if earlier without any reason for the person leaving, which is fine, but  is a little different than the norm.