Is the Plan a deferred compensation plan under Code section 409A?
Contributions to the Plan should not be treated as deferred compensation as long as it is operated in the manner in which it is structured. There is no certainty that any participant will actually receive any of the contributions to the Plan since there is no certainty that any participant will qualify to receive any benefits. In the case of post-retirement benefits, the participant must remain in the employer’s employ through the designated retirement age and otherwise satisfy the participation requirements. There is no vesting prior to any of these events and there is a substantial risk of forfeiture. Furthermore, unless the plan is fully terminated no participant may obtain the insurance policy on his or her life without buying it at full fair market value, as that term is interpreted by the IRS. This in not a program offering a policy buyout at less than fair market value (e.g. at 10% of cash value) or a plan offering distributions of policies or other assets upon retirement or sev
