What are the 409A implications in the following situation:

Under 457(f), exec vests in right to lump sum amount (say, $100k) at age 60 (which will occur in 2009) and will receive payment upon separation from service, but will get it (i.e., vest) prior to that if involuntarily terminated. Employer and employee want to renegotiate the amount of the lump sum down to $50k before the end of 2008. Can that happen w/o causing problems? There will be no deferral of comp until 2008 b/c SROF hasn't lapsed. Assuming the timing and form of payment isn't changed (no acceleration and distribution rules not violated) is this just a permissible substitution without consequence?

What is the employee getting in return for giving up prospects for $50,000?

His job.

And all possibility of raises and other additional compensation in any form after 2009?

I would imagine so.

Unbelievable, but compliant.