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Is an unfunded salary continuation plan for a single exec subject to 409A? Plan to start after voluntary retirement date.

Asked over 2 years ago - Los Angeles, CA

Longtime manager of large building is seeking some retirement security. Employer is willing to provide a salary continution plan for ten years at 50% of final annual salary. Recognition of income and deduction at time of payment. Payments made to heirs if manager dies during payment period. Is 409A applicable?

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Attorney answers (1)

George F Cicotte

Reputation Level 8

Answered over 2 years ago. Employee Benefits Lawyer in Kennewick, WA.

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Yes, 409A applies. However, it should be relatively easy to comply with 409A here . Make sure distribution dates are set before the deferral occurs, prohibit accelerations, and don't allow any changes. This should be straightforward based on the facts stated in your question.

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