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” 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.
There are only six events that allow the plan to distribute assets:
1. Separation from service as determined by the Secretary (except as provided in subparagraph (B)(i)),
2. the date the participant becomes disabled (within the meaning of subparagraph (C)),
4. a specified time (or pursuant to a fixed schedule) specified under the plan at the date of the deferral of such compensation,to the extent provided by the Secretary, a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, or
5. the occurrence of an unforeseeable emergency.
These terms are not subject to over-lawyering. Potentially malleable terms (e.g. “disabled” or “separation from service”) are further defined in the statute or require the Secretary’s approval.
The underlying message is clear: don’t get cute.
 Treas. Ref. 1.409(A)(c)(1)
 Synonyms: 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)
Have a question? Contact Hale Stewart
Your comments are welcome!