david rigby

And additional discussion here:

DB plan sponsor is an insurance company, currently in receivership under its state insurance department. This status has not altered the plan's requirement to do annual valuations, file 5500, etc.; the actuary prior to receivership is still in place. The prospects for rehabilitation (and/or coming out of receivership) are virtually nil. While there is no formal statement yet from the state DOI, it appears likely the DOI will seek to have the PBGC take over the plan. (The plan actuary has not been part of discussion, if any, between the DOI and the PBGC.) Most recent AFTAP is around 100%, but a termination ratio is estimated around 70-75%. The plan has been frozen for several years. The plan has an unlimited LS option. The current question is whether any PBGC regs and/or practices would require the plan to suspend (ie, before any formal action by the PBGC) the use of the LS option for anyone currently reaching a benefit commencement date (retirement or otherwise)? My review found nothing on point; checked all the Blue Books, did not see anything in the regs (although that might be easy to miss). Any relevant experience? Ideas/suggestions?

Not the first time for this question:

I see an additional value: an opportunity to put the prior beneficiary designations in front of the participants, requesting changes and/or affirmation.

FWIW, I experimented with my T. Rowe Price account (sorry, no information w/r/t documents or platform): the online system would allow me to change a 50/50 allocation to 50.5% / 49.5%. It would NOT allow me to change to 50/49.

Pardon me, but is there a concern about the original question? The correct 1099 process should be very well-known at the TPA level. Shouldn't it?

Authorship is paramount in the decision process. Tom Poje? yes. Mike Preston? yes. Peter Gulia? yes. Gary Lesser? yes. Others? maybe.

Problems? Who is doing the "assigning"? Minimums? Maximums? Corporate resolution? As always, put on your consulting hat and ask the other questions: what is going on? what are you trying to accomplish?

Avoid the word "fire". Use the word "resign". Be polite and direct. If there is any work in progress, make sure you address it.

Use the Search feature, with words such as "embezzle", "theft", etc.

Is there some reason the participant does not immediately eliminate this doubt by submitting a NEW beneficiary designation?

It would surprise me if this question is not already answered in the plan document.

What does the plan say? Does the plan include administrator flexibility to purchase an annuity? Hint: most plans do. If so, the word "termination" is not relevant. BTW, if the plan does make such a purchase, please avoid the phrase "pay out the retirees".

Could the NRA be defined as "age 59-1/2 + 5 years of plan participation" (ie, the plan definition in original post above), but not later than "age 65 + the fifth anniversary..." (ie, the statutory limit)?

In advance, consider how this status might change if credentials change (quit, die, retire, etc.)

It's worth asking.

My spreadsheet goes to 120, although that table goes only to 110. (Limit to 3 decimals? No way.) 80 68.6052744 81 65.5978053 82 62.7009606 83 59.9159730 84 57.2396120 85 54.6642242

Every pension actuary (and Plan Administrator) has worried about this since RMDs became a thing. To date, there is no consensus. (I'm mostly retired, so it's possible my info is out-of-date.) This problem has a corollary: what do we do now to minimize the problem later? My recommendation is to "put the fear of God" into them as they are walking out the door; ie, remind them that (1) keep the paperwork that we give you because it means you have a deferred benefit and there might be a surviving spouse benefit, and (2) it is your responsibility to keep us informed of your mailing address, and (3) you will be taxed on the benefit at NRD even if you don't start receiving it. @Carol V. Calhoun, I don't pretend this is foolproof, but I have seen some HR departments recognize that it helps. Having the sponsor's attorney reinforce the actuary's suggestion might also be helpful.

There is what's required, and then there is what's wise. Send them some type of notice.

Peter's reference to Larry Starr can be summarized at this comment. Larry makes a good point, and every consultant should be aware.

Aha!. This implies the plan now has spousal consent language. Don't simply ignore it, or amend it away, without checking with your ERISA attorney.

The following may or may not be hypothetical. HE and SHE are considering becoming Husband and Wife. Second marriage for both. Both have adult children from first marriage. Both age 70. Both have investments that fall into the common categories: a) individual investments, such as stocks, bonds, mutual funds, none of which are part of an IRA or qualified plan. b) small cash accounts (checking, savings, CDs). c) retirement accounts, including all of the following: traditional IRA, Roth IRA, 403b plan (governmental), and 401a plan (ERISA-covered). All retirement accounts are individual accounts, not defined benefit. None of these accounts have reached Required Minimum Distribution. All accounts existed long before HE and SHE met each other and have no potential beneficiaries other than children. There are no real or potential QDROs. All current accounts have named children as beneficiary(ies). d) There may be other property with small (but non-zero) value such as vehicle, artwork, real estate, antiques. Both parties want the following to happen: Current retirement accounts will not be commingled. Upon the first to die, the retirement accounts and investments of the deceased will remain in existence and the income (and/or RMD) will be payable to (for the benefit of) the survivor. The principal of the retirement accounts and investments would NOT be available to the surviving spouse unless the spouse's investments become exhausted. Non-investment property (i.e., items that do not produce income) of the first-to-die (such as a car) might remain with the surviving spouse or go to the surviving children of the deceased (to be determined). Upon the death of the second, the ownership of all remaining investments (in all categories above) will pass to the children of the original owner. For example, if HE dies first, at the time SHE dies, all of HIS investments and IRAs and accounts will become owned by HIS children, and all of HER investments and accounts will become owned by HER children. What method(s) can be used to accomplish this? Would the marriage automatically alter any beneficiary designations in effect for any of the above investments or accounts? Does it require both pre-nuptial and ante-nuptial agreements to document the intent and actions? What have I forgotten?

This situation is similar to alimony. Have you considered that approach? (Note, remember to make sure there is no temporary status, such as "payments until X date".)

Corollary: what do beneficiary forms and/or SPD and/or any other EE communication say about this feature?

Just to be thorough: was the "new" marriage at least 12 months? If not, does the plan use the 12-month rule?