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Sounds like you should do the AE adjustment from March to December on the benefit, and then calculate the lump sum as of December based on the adjusted benefit.

Sure, explore that process. But get review by the plan's ERISA attorney. Also, consider whether you need review by your own attorney also.

1. Review the document to determine if it helps with your question. 2. Hire a pension actuary to assist you, especially one that has done several plan terminations. That actuary has probably seen similar situations and might recommend some solutions. One solution might include "creative" communication to encourage the participant and/or spouse to sign. For example, many years ago, I had an unresponsive participant with a LS of around $4000 (the LS limit at the time was $3500). We advised the participant that, if there was no response by X date, the plan would be required to purchase an immediate J&S annuity (because we already knew that no insurer was willing to sell a deferred J&S), and the approximate benefit would be about $20 per month. BTW, it worked and the participant completed the form for LS payout.

If you're going to offer a match to 457(b) contributions, you want the match to go into a 401(a) plan. That could be the existing one, but with a separate benefit structure for the part-time employees, or a new one. The problem here is that the 402(g) limit ($23,500 in 2025, disregarding catch-ups) for 401(k) and 403(b) plans applies only to the employee's own contributions. However, the comparable limit for 457(b) plans applies to the aggregate of employee and employer contributions. So for example, if the employer is doing a 100% match and putting it all into the 457(b) plan, the employee could contribute a maximum of $11,750. That would give rise to an employer match of $11,750, and the employer and employee contributions together would equal the $23,500 limit. However, if the employer match goes to a 401(a) plan, the employee could contribute up to $23,500 to the 457(b) plan, because the contributions to the 401(a) plan would not count against the limit.

fmsinc - Hugh? OP said NRD was 62 w/ NRD 3/1/25. Since he didn't receive his benefit as of 3/1/25, it must be actuarially adjusted to reflect the delayed payment. (This assumes he was not working in suspendable service after 3/1/25 and timely received a Suspension of Benefits Notice.) If he was terminated as of 3/1/25, or if he was active but didn't receive an SOBN, an actuarial increase is required. First you need to adjust the accrued benefit to reflect the delayed payments, then apply the lump sum factor at the age of distribution. This has nothing to do with a DC plan, no idea what you are referring to with those comments.

Well the issue here is that my clients are too small to pay the exorbitant fees for that kind of a service. I think those services (which are awesome and well worth the fees charged) are really only available to the larger plans (say $50MM or more). As an example I have a plan with 15 people who wanted to add it!

Regardless of the status of the proposed cafeteria plan nondiscrimination regulations, the §125 nondiscrim rules are easy to pass. That's not a concern. The hard part will be that the new §128 for tax-free Trump Account contributions through and employer includes a requirement to apply rules "similar to" the §129 dependent care FSA nondiscrimination rules. That means the dreaded 55% average benefits test will likely apply. That wasn't so much of a concern when it initially looked like Trump Accounts were only going to permit employer tax-free contributions, but now that employees may be able to contribute pre-tax it is very likely that HCEs will contribute disproportionately. That will presumably cause routine failures of that 55% average benefits test in the same vein as with dependent care FSAs. https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf ‘‘(c) TRUMP ACCOUNT CONTRIBUTION PROGRAM.—For purposes of this section, a Trump account contribution program is a separate written plan of an employer for the exclusive benefit of his employees to provide contributions to the Trump accounts of such employees or dependents of such employees which meets requirements similar to the requirements of paragraphs (2), (3), (6), (7), and (8) of section 129(d).’’.

Thanks again to responders! We decided to provide the former participant with a letter stating that as a former participant with no benefits in the plan now, she is not entitled to receive an SPD at this time. We provided a copy of the last statement she received which reflected the amount she was paid along with the check number and date of her benefit check which was rolled over to an IRA. We stated that we do not maintain historical copies of SPDs. We think she met with SSA in-person as she was never reported on Form SSA which would explain why her request was stated the way it was. We do have copies of historical plan documents but did not provide that to her.

vested account balance.

Not entirely. I have seen that ... see below from DOL website... this is just part of the notice. Based on her response, she could simply be looking for "lost" retirement benefits.

Consider that a plan might provide several different measures of compensation with different purposes and uses. That § 415(c)(3) compensation for applying an annual-additions limit might exclude a parsonage allowance [see IRS Ltr. Rul. 2001-35-045 (issued June 7, 2001, released Sep. 2001) (interpreting then 26 C.F.R. § 1.415-2(d)(3)(iv), now 26 § 1.415(c)-2(c)(4)] does not by itself mean other measures exclude the parsonage allowance. A plan might use a distinct measure of compensation to determine allocations of a nonelective contribution. And might use a yet different measure to determine participant contributions. A plan’s definition of compensation that counts a parsonage allowance could not be contrary to ERISA’s title I because that law does not apply to a church plan that has not elected to be ERISA-governed. Although nothing commands a plan’s sponsor to state provisions that meet conditions for § 401(a) or § 403(b) tax treatment, a plan sponsor might prefer to do so. Some IRS guidance supports a definition of accrual compensation that includes a parsonage allowance as not contrary to § 401(a), assuming other conditions are met. Rev. Rul. 73-258, 1973-1 C.B. 194, CCH Pension Plan Guide Pre-1986 Revenue Rulings ¶ 19,233 (“[A]mounts that are excludible from a minister’s gross income under section 107 of the [Internal Revenue] Code are compensation for purposes of section 401(a), and their character as compensation is not changed by the fact that they are excludible from gross income.”); see also Revenue Ruling 73-381, 1973-2 C.B. 125 CCH Pension Plan Guide Pre-1986 Revenue Rulings ¶ 19,260 (“The fact that the value of meals and lodging may be excluded by statute from gross income does not alter its character as compensation upon which benefits may be based.”). Both those rulings are about church retirement plans. I have not checked whether those rulings remain the IRS’s interpretation. As ever, Read The Fabulous Document. This is not advice to anyone.

And the plan must have the safe harbor provisions. It is not considered safe harbor if the plan does not say it is safe harbor.

No. A match of 100% on the first 6% satisfies the ADP and ACP safe harbor (assuming no allocation conditions, vesting rules, notice requirements, etc. are satisfied). The 4% rule you reference comes into play when a discretionary match is funded in addition to a safe harbor formula. If there is a discretionary match in addition to a safe harbor match, then to satisfy ACP safe harbor, the match cannot take into account more than 6% of pay and the match contribution cannot exceed 4% of pay.

In 1977, as I began law school, I started working as a law clerk and was quickly given responsibility for the firm’s qualified plan practice. When I passed the bar in 1980, I stepped fully into a career that has now spanned more than four decades. As I begin to slowly wind down those years as an ERISA attorney, I am deeply grateful for the opportunities that have come my way and for the encouragement and help of so many good men and women. I never dreamed, in the ’70s and ’80s, where this practice would take me. As this year began, my ERISA work fell into six main roles: I’m an author. I have written or co-authored five books dealing with retirement plans, and am nearly done with my sixth—the ERISA Fiduciary Navigator eSource—all published by ERISApedia.com. I head the ERISApedia ASK service, where my protégé, Adriana Starr, and I answer questions from ERISA practitioners. I present webcasts and live seminars on retirement topics. I draft plan documents and interim amendments on behalf of the Relius division of FIS. I serve as of counsel to the Ferenczy Benefit Law Center. I assist some clients in a private practice. One of the observations that has struck me over the years about the Employee Retirement Income Security Act is that it never defines “retirement.” My own working definition has been “separating from service once you’re old.” But the older I get, the older “old” gets. Still, as I near RMD age (even after SECURE 2.0), it's time to start thinking about saddling up and riding into the sunset. I envision retirement as gradually dropping things out of the saddlebags. So, with mixed emotions, I announce that I will no longer be acting as of counsel to the Ferenczy Benefit Law Center or conducting a private practice. I will consult on special cases, but otherwise, for now, my professional endeavors will focus on writing, teaching, FIS, and the ASK service. Planning for the financial side of retirement has been the easy part. The emotional and professional side is more challenging. My hope is that a slow and gentle ride toward tomorrow will make that transition easier. I am profoundly grateful to the colleagues, clients, and friends who have shared this journey with me—and I look forward to continuing to write, teach, and cheer you on from slightly lighter saddlebags.