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Relative value disclosure under 5k of lump sum


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Hi

Having a brain freeze as I have not had a low pay out for quite sometime.

Is the relative value disclosure required for a lump sum under 5k (over 1k) and if yes, do I need to show the monthly benefit equivalences?

Thank you

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What does the plan document say?

If it says that benefits with a present value less than $5,000 will be paid out in a lump sum and the participant cannot elect another form of benefit, then you do not need to provide the alternate forms and relative values since the participant could not elect them.

If the plan permits the participant to elect a life annuity or other form on small benefits, then you would have to provide them with the disclosures necessary for them to make the election.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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