This is cross-posted at the Wealth and Risk Management Blog
In this post, I’ll take a look at several more definitions related to non-qualified deferred compensation (NQDC) plans, beginning with the definition of “plan:”
“The term plan includes any agreement, method, program or other arrangement, including an agreement, method, program or other arrangement that applies to one person or individual.”
Here, we see the Treasury using the standard definitional tactic of using several words that, while moderately different, convey the same idea. However, the commonplace definition of the word “plan” (“a method for achieving an end.”) along with its synonyms would have sufficed.
The plan must be in writing. While not explicitly stated, it is strongly implied in the regulations.
“…a plan is established on the latest of the date on which it is adopted, the date on which it is effective, and the date on which the material terms of the plan are set forth in writing. The material terms of the plan may be set forth in writing in one or more documents.”
In addition, because of the sheet complexity of NQDC, it’s best to have a governing document. (I googled the search term “NQDC sample plan and found several online examples, here, here and here).
There are only six events that allow the plan to distribute assets:
 Treas. Ref. 1.409(A)(c)(1)
 Id (“arrangement, blueprint, design, game, game plan, ground plan, master plan, program, project, roadmap, scheme, strategy, system”)
 Treas. Reg. §1.409(A)(3)(i):
 26 U.S.C. 409(A)(2)(i)-(vi)
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