david rigby

Likely, no election has been made. Probably, 55% is the plan's default percentage. Because he died, no other options are available. Yes, you can defer commencement of your benefit, and it will increase the monthly amount. The amounts you provide appear to be sensible: 623.33 x .64 = 398.93, his benefit assumed payable at age 60 398.93 x .935 = 373.00, his benefit at age 60 assuming the 55% surviving spouse form of payment 373.00 x .55 = 205.15, your benefit at his age 60 (equivalent to assuming he retired on his 60th birthday and died immediately) [Please note that no one here has the ability to verify the original amount, 623.33.]

Assignment may be irrelevant. Will the Plan Administrator write the spouse's name on the check? If the PA is being cautious, expect a NO response.

A good way to solve this problem is to hire an actuary.

Yes, your attorney should, but she might not. Here is an example of what might be your situation: - Suppose your ex had earned a benefit of $1000. Assuming this is a defined benefit pension plan, that (probably) means he could retire at 65 and receive $1000 per month for his lifetime. This lifetime benefit (usually) includes no survivor benefit. - Instead, if he retired early (e.g. age 55), he could receive the same benefit, but reduced to reflect the longer period of payment; in this case, the monthly amount may be about $500. - Upon retirement, he gets the option of receiving a lesser monthly amount in order to guarantee a continuing benefit to a surviving spouse. If that continuation is half of his benefit, then the result might be $450 to him and $225 to the spouse (paid to her only if she survives him). The reduction from $500 to $450 is the "cost" of providing the benefit guarantee to the spouse. - If the person is vested in his benefit (even if no longer an employee of the company) the plan must provide a similar guaranteed spouse benefit even if he dies before reaching retirement age. In my experience, a large majority of plans use that definition as a default. Just a guess: the benefit due to you is based on his accrued (earned) benefit, reduced to reflect early retirement date, also reduced to reflect an assumption that he elected a payment form to provide the 50% surviving spouse benefit, and also reduced for the 50% to the spouse.

Cash value annuity? What do you mean?

Such a simple concept, so often ignored.Implicit in QDROphile's advice is that actual plan administration should also be consistent.

Might be hasty to assume this is "IRS v. DOL". It might be "001 vs. 002" (that is, a simple mistake).

GMK is suggesting that the plan can be amended to modify the definition of leave in the special case of death. Assuming the plan sponsor wants to make that modification.

Don't know about Code/regs, but your provision is very common in my experience.

What is your relationship to the plan/termination process? The actuary will know how to do this, and will know how to read this reg: http://www.pbgc.gov/practitioners/law-regu.../page14765.html

There are a few prior discussion threads related to this topic. You can use the Search feature, possibly with a search word such as "illegal". But read Post #10 in this one: http://benefitslink.com/boards/index.php?showtopic=40702

Any comments, Peter?

Not such a great guarantee, huh? BTW, read the contract carefully, rather than take at face value anyone's statement that such adjustment must apply.

Think outside the box: perhaps a relative loaned the money to the EE? That just takes care of the immediate need to pay the invoice, but does it eliminate the hardship?

Could someone else have paid the bill, as a loan?

Logan, Allocations that are based on flat dollar, in whole or in part, will provide a very favorable basis for non-discrimination testing (ie, the pct is higher as the comp gets lower).

The Enrolled Actuaries Report (published quarterly) includes a 2-page chart of the primary limits, some with unrounded amounts. http://www.actuary.org/ear/index.asp Each year, look in the Winter edition.

My 2 Cents is stating facts. Andy is ranting, and justifiably so. Yes, the funding rates and LS rates will move toward each other, but never meet. The larger problem is implied by Andy's example: use of the stability period can/will distort payments away from "true" market value at the date of payment. The answer to the question: is that Congress has created another bureacracy/set of rules, rather than fixing the problems with the prior ones.Here is my preferred PPA rules: 1. Use pre-PPA section 412, gradually raising the 90% test under 412(l)(9) to 100%. 2. Change LS interest rates to equal the current liability rates 3. Require all Americans to hire an actuary. (Instead of 900 pages, PPA would have been 3 pages. Just think of all the trees that could have been saved.) End of rant.

http://www.irs.gov/retirement/article/0,,id=117588,00.html

Dr. Seuss

... and the filing of the 1040 as a "first offer".

Usually true, and certainly what is contemplated in the ERISA-defined J&S benefit. However, the plan can define additional optional forms of payment that might offer other flexibility (think, "pop-up"), subject to spousal signoff as appropriate. Thus, as AndyH says above, check the plan document.

Hey Tom, how do you mean "useless"? This is important information.

If you are going to use a facts and circumstances test, be sure to use all the facts, not just some of them. Note the discussion in 1.401(a)(4)-5(a)(2) uses the phrase "...has the effect of discriminating significantly..." IMHO, it is relevant to consider whether the proposed plan design/timing is both discriminatory and significant. For example, if the benefit formula uses all service, then the eventual benefit received by the NHCEs (assuming they reach a non-zero vesting at some later date) is exactly the same as if the plan had existed prior to their hire date, with a possible conclusion that there is no discrimination.

Is that a different result under a facts and circumstances test?