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Mandatory cashout at RBD interest question


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Deferred vested participant died after RBD.  When calculating his actuarially-increased benefit (from NRD to RBD), the lump sum amount is below the Plan's threshold for a mandatory cashout.  RBD was 4/1/10, DOD was 11/6/17.  We've already established that his Estate is due the mandatory cashout, however, would interest need to be applied to that lump sum and if so, from RBD to death or RBD to distribution?

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IMHO, you cannot answer the question of "is this above/below LS threshold" until after you have answered the other question.  Is there any other guidance (or plan provision) to suggest otherwise?

BTW, I'm not sure that additional interest is the only (or correct) option for your adjustment.  My first thought would be to include the "missed" monthly payments, with interest adjustment; but there might be valid alternatives.  Any precedent (whether or not deceased)?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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