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Savings clause

A provision in an NQDC plan which states that the NQDC plan is intended to comply with IRC Section 409A. The savings clause is included with the purpose of making sure any ambiguity in interpreting the plan is resolved in favor of a pro-Code Section 409A interpretation to avoid penalties, as explained in Employee Benefits Law Report. The plan’s substantive terms must still comply with Section 409A. Only when a term is ambiguous or not clearly defined could a savings clause “tip the balance in favor of a Code Section 409A-compliant interpretation.”