52626 Posted January 10, 2023 Share Posted January 10, 2023 Company B is merging into Company A ( controlled group issue and surviving plan). Company B's definition of disability - determined by a licensed physician Company A ( the surviving plan) does not require physician approval. The document states The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The permanence and degree of such impairment must be supported by medical evidence. Company A wants to use the Social Security Administration as the determination for disability. Is there a protected benefit issue here? Can the plan change licensed physician to Social Security and not have any protected benefit issue? Link to comment Share on other sites More sharing options...
CuseFan Posted January 10, 2023 Share Posted January 10, 2023 Disability benefits are ancillary, not part of the accrued benefit and may be amended (and eliminated, if desired) without issue. The only potential issue is if you have an existing disability claim or current disability stream of payments (like under a DBP). If your only concern in determination/definition of disability, no problem. acm_acm and Luke Bailey 2 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
MWeddell Posted January 11, 2023 Share Posted January 11, 2023 A plan's definition of disability may also affect vesting, forms of benefit payment, and whether there is a distributable event. I think you have to consider what is impacted in your client's plan and proceed carefully, considering both Treasury Regulation Sections 1.411(d)-3 and 1.411(d)-4. Luke Bailey 1 Link to comment Share on other sites More sharing options...
KEC79 Posted January 18, 2023 Share Posted January 18, 2023 I agree with MWeddell. I tend to treat disability definition as protected if it impacts vesting, withdrawal rights, distribution rights, etc. If the "new" definition is clearly and unambiguously easier for a participant to meet then there's no issue. Luke Bailey 1 Link to comment Share on other sites More sharing options...
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