david rigby

Great question. For the most part, the DB plans I saw had no alternative procedure or standard. In some documents, the definition reads as follows: "Total and Permanent Disability means a physical and mental condition of a Participant resulting from bodily injury, disease, or mental disorder which renders such Participant incapable of continuing any gainful occupation and which condition constitutes total disability under the federal Social Security Act". Careful reading reveals that this definition does not explicitly require the participant to apply for (and receive) SS disability; it's possible a plan's administrative committee might interpret it that way in the examples you provide, especially leaning on the word "constitute". However, I never saw it happen.

Is there a definition of "official inflation-adjusted amount"? Since citizens/taxpayers are entitled to interpret the Internal Revenue Code on their own, would a statute-defined increase not apply solely because the IRS has not made any identifying statement? What if the IRS never issues any "official" statement? Can such failure to issue a notice be equivalent to "no increase applies"? Is it reasonable to not increase the 402g limit merely because the IRS ignored/failed to issue some "official" document, especially since you know it should be increased? Similarly, what about an increase in the 415(b) limit, knowing that some participant purposely waited for that increase before taking a LS distribution from his/her DB plan? IMHO, issuing EE communication that ignores an increase (i.e., using the prior year amounts) or failing to apply a statute-defined increase seems to abdicate reasonableness and common sense. In case you cannot determine from my rhetoric, my suggestion would be to calculate any applicable limit as best you can. (There is at least one publicly available calculation spreadsheet here on BenefitsLink. Several private parties, actuarial consulting firms, CPA firms, attorneys, etc. also do the same.)

"Small amount" is (usually) relative to the plan size, and whether there might reasonably be "unpaid and/or unbilled" expenses.

No dispute with prior advice. Possibly relevant is the change of actuarial firms: was the plan sponsor less than forthcoming with the prior actuary, and/or less than willing to pay fees? I'm suggesting the delay might be explained by plan sponsor actions and/or inactions that caused the prior actuary to "drop out". This is not an excuse, but it might be an explanation.

No one reading here will have any information that is more important than reading the actual plan document(s) and annuity document(s).

Just thinking out loud, are you sure this option is no longer available?

A few other discussion threads here touch on taxation w/r/t estate. In a nutshell, an estate is not a natural person, so it cannot open (or add to) an IRA. Therefore, assuming the distribution is a lump sum, the distribution to the estate is NOT rollable. Therefore, the 20% withholding does not apply. Therefore, the "other default" withholding applies: 10%. However, as mentioned in the instructions to Form W-4R and/or Form W-4P, an estate has the right (just like any other recipient) to elect zero withholding. Therefore, the plan administrator must provide the opportunity to make such election (eg, put a copy of the forms in the hands of the estate administrator). But, before that, the plan needs ERISA legal advice to confirm whether or not the "...QDRO requires the distribution in this case to be made to the estate." (OK, I admit to being skeptical. It is not common for a QDRO to do so, and it seems unlikely the QDRO can override what the plan says about the spouse's right to name his/her own beneficiary.) If the payment to the "former spouse" is the remainder of a "ten-year-certain-and-life" form of payment (or something similar), that might be one case where the remaining payments* go to an estate; however, before jumping to such conclusion, it is important to determine whether the spouse has already elected a beneficiary. Thus, my urging to get legal review. *Note this example might have "remaining payments" as a monthly/quarterly annuity or a lump sum, maybe an option. It seems likely the estate should request a lump sum if given the option.

Regardless of other concerns, whenever I hear this phrase, my initial response is, "What reasoning have they given you?" If there is none given, has it been requested? (Close the first loop before opening other loops.)

Please review the actual plan language. It may already answer the question. Or it might rule out a particular alternative.

Are you saying you want to freeze the benefit for the HCE(s) only? That sounds non-discriminatory to me. Don't forget to consider how/what would happen at some future date when/if the HCE is unfrozen.

Does "location" come into play when evaluating whether disaster relief applies? For example: Suppose plan sponsor's main location is not in disaster area (as declared by IRS/DOL/etc.), but it's HR department is in such area, and this causes delay in filing of Form 5500? Similarly, suppose plan sponsor is not affected by natural disaster but the vendor who prepares 5500 is in disaster area? Corollary, suppose plan sponsor is not in disaster area nor is "main office" of the vendor, but the vendor's remote employee with such responsibility is in such disaster area?

In general, most plans do not allow any form of payment to be changed after the commencement date. Very likely, a joint and survivor benefit cannot be changed. Therefore, the choice of beneficiary has already been made; you both choose the other spouse. Important: this selection of spouse as beneficiary does not mean, "whoever is my spouse at my date of death", but instead it means "whoever is my spouse at the time my payments begin", so that subsequent divorce is not relevant. Usually, so you should verify. You state in original post, "...the beneficiary was to be revoked...". Since each person's benefit is in pay status, any "revocation" would be an impermissible change under the plan. The divorce decree has no authority to alter the plan. Also, your children and/or trust will not be relevant, since no beneficiary change is permitted. Also, it is unlikely a QDRO could change anything because a QDRO has no authority to require the plan to do something outside of existing plan provisions. As far as I can tell from your description, there is nothing to be done. Whichever of you (exes) outlives the other will receive the relevant survivor benefit from the deceased's benefit form, and no one else will get anything. A few plans might allow some type of change, but it is extremely rare; you should verify within the paperwork you received at the time of your election. For what it's worth, in my 40+ years as a pension actuary, I saw exactly zero plans that permitted a change of joint and survivor form or beneficiary after the payment commencement date.

How old are the participants? Is the benefit equal to the 415 limit?

Agree. However, there might be another possible action that comes first: increase the benefit formula, even if only slightly. It may get you to the same place, but it has the potential to eliminate any excess allocation, especially if you get the excess down to some small amount that will be absorbed by the final expenses.

It's not a stretch to think the goal of the appeal is NOT "reinstate" but something else, likely money. The original poster should thank @Peter Gulia for his extraordinary list of questions. Of course, as he often states, he's not giving legal advice, but he gave some pretty awesome "non-legal" advice.

Both Manhart and Norris involved governmental plans. Technically, those decisions did not apply to other plans, at the time.

Don't forget to consider whether any communication received is a claim, which then triggers the claim procedures in the plan document. It's possible that the plan has decided "correctly" but still has not responded to one or more claims according to the plan requirements. The plan's ERISA counsel will likely remind the plan of this procedure.

You misunderstand the application of Norris. The ruling states that you cannot use different tables for males vs. females. You can use any table so long as it is reasonable for the stated purpose, and defined in the plan (ie, the "definitely determinable" requirement of ERISA), and you apply it equally for males and females. Using different tables for participants vs. beneficiaries is also acceptable (likely, it is advisable). The definition you quote is probably reasonable, but other reasonable tables are also possible. The Enrolled Actuary can provide examples of several different tables/updates.

Yes, and that means the Plan's legal counsel, not counsel for either party. If "plan administrator" refers to a TPA, the plan's legal counsel can discuss with the TPA legal counsel, but the former overrules the latter.

The interest of clarity and good documentation is always appropriate. Do an amendment, whether or not required.

Since you used the term "primary beneficiary", perhaps there is, either by affirmative action or by plan provision, a secondary beneficiary. Check the company personnel file for any other possible beneficiary election, and then check the definition in the plan document. Hint: the document might define someone else before the estate. BTW, you will eventually pay someone (estate or a real person), don't forget the withholding rules: an estate is not eligible to open an IRA, so a payment to an estate is not rollable, therefore the (usual) 20% withholding does not apply. Next in line is the "other withholding" rate of 10%, but the estate has the right to elect zero withholding. Read the instructions for the W-4R form. https://www.irs.gov/forms-pubs/about-form-w-4r

@John Feldt ERPA CPC QPA Can you do this the other way? Since your list shows only one item that does NOT increase, what is the minimum inflation of August/September that will cause that limit to increase?

Many years back in my actuarial career, I was employed as a benefits administrator for a large corporation. The parent company was (constantly) involved in buying or selling subsidiaries. Our in-house attorneys were kind enough to invite me to read a draft buy-sell arrangement. I offered several (six or eight) different changes they had never thought about, concerning various benefit programs, on both sides. This included pointing out that this or that change might have some cost, but any additional cost was likely to be very little, and could be worth much more in positive PR. It made an impression, and I was invited to contribute when later M&A stuff arose. While it may have seemed small, I've been proud of helping those attorneys, who took that advice forward into their own later careers. The lesson (similar to what RBG says above): it's important to get multiple types of expertise involved at the beginning, because some omissions (i.e., mistakes) cannot be easily remedied after the transaction is closed. And pay attention to effective dates.

Exactly! The date(s) on which assets move (by the way, there might be no requirement to any such asset movement), is a matter for the recordkeeping (ie, documentation) of the trust. It has nothing to do with any effective date of plan merger. It is a mistake to conflate these two items, and would (likely) result in incorrect information being attached to the 5500, audit report, participant statements, etc.

Why? As mentioned in a previous thread, if the merger documents are properly defined and executed, the location of the assets is NOT relevant.