NQDC plan says that executive receives an amount in his "account". Each year, account is "credited" with an amount determined pursuant to a formula. Service provider is fully vested -no SRF. Parties want to "amend" the formula? Is that a permissible change? If so, what is the authority? Thanks.

409A is concerned mostly with timing, not amounts, so a change in benefit amount is not necessarily a problem. You have to be careful that the change is not a late deferral and that the change is not some sort of scheme to exchange or replace compensation with the effect of improperly accelerating or further deferring deferred compensation. For example, if you reduce an amount of deferred compensation payable in five years, but also provide a bonus to the employee, have you just accelerated payment of some of the deferred compensation by paying it currently and calling it a bonus? It gets very sticky, depending on all facts and circumstances.

I take the position that, since amending benefit amounts/formulas is not specifically prohibited by the 409A Regulations, that it is allowable unless and until Treasury says otherwise. I agree with QDRO that care must be taken in ensuring the change does not impact the form or timing of benefit payments (for example, the regulations clearly prohibit altering the # of installment payments due unless the Subsequent Change Rules are followed), but as long as the form of payment and timing of commencement of payments remains unchanged from the original, amending formulas, benefit amounts, etc. should be allowable.

One more vote of agreement with QDROphile and Steve.