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Restricted Employee Distribution

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DB plan restricted employee retired at age 62, NRA is 65. The regulations say the payment is restricted to: A straight life annuity that is the actuarial equivalent of the accrued benefit and other benefits to which the restricted employee is entitled under the plan (other than a social security supplement).

The plan definition of actuarial equivalence is 8% UP84. The early retirement reduction is defined as 1/15, 1/30. The normal form is 5 C&L. Given the ER factors the plan's early retirement life annuity is much larger than the actuarial equivalent life annuity using 8% UP84.   

Is the subsidized ER benefit considered “other benefits”? Are the early retirement factors considered actuarial equivalence?

What is the restricted payment amount in this situation?

 

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