So Long, Farewell: Designing Exit Packages When It’s Time to Say Goodbye

Plan sponsors have many decisions to make in designing exit programs and should be aware of the consequences of their choices. Considerations include whether to offer a voluntary or involuntary plan, whether to seek coverage under ERISA for such a plan, and, if so, whether it should be a welfare plan or a pension plan. A group layoff can occur all at the same time or it can be staggered, as long as all the terminations are part of the same decision-making process. Either way, the requirements apply to all such terminations. And then, don’t forget that, with executives particularly, there may be Section 409A considerations.

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