Macuus

Many thanks for these clarifications. It is very helpful. The other issue I am grappling with is the determination of the value of my benefit, particularly the method to arrive at a lump sum payment. The cash balance account consists of, (a) the opening balance, which is the conversion of an annuity of a previous defined benefit plan to a lump sum present value, (b) annual pay credits, which in my case are not relevant, and © annual interest credits (at the 1-year TCM). As I quoted earlier from the SPD, "you have the flexibility to take the benefit with you as a lump sum payment, or...annuity, etc." In the Payment Forms section of the SPD the text reads: "Single lump-sum payment. This optional form of payment pays your full account to you in a lump sum. No additional benefit is payable." The problem is that the sponsor never communicated the value of the cash balance account in a manner that makes sense to me. In my opinion the value of my account over time could only go up - it consists of the opening balance and annual interest credits. Instead the sponsor publishes a 'one-time payment amount', which varies widely, and above all, in 2014 was about 13% lower than in 2013. The sponsor explained that this was due to actuarial factors such as benefit commencement dates and interest rates, indicating that the 30-year treasury rate in 2013 was lower than in 2014. At the same time, the benefit value expressed as a single life annuity benefit published by the sponsor remained constant over the last five years, exact to the penny. In the SPD, the text under Optional Payment Forms contains the following statement: "Keep in mind, if you are married and wish to elect an optional form of payment (equal to an actuarial value that is the equivalent to your single life annuity benefit), you will need to provide your written election, along with your spouse's written notarized consent." If I take the single life annuity benefit amount and use my IRS life expectancy (18 years) and use the Minimum Present Value Segment rates (first segment and second segment), I arrive at a substantially higher lump sum amount than the one the sponsor has told me I am entitled to, i.e. the 'one-time payment' amount mentioned above. It is a mystery to me how a supposedly ever increasing cash balance account converts to a constant single life annuity benefit, which is then discounted at the 30yr treasury rate which varies from year to year (and month to month). And, if this method is permitted in the plan, why do the IRS present value segment rates not come into play? Any thoughts what to do?

At the request of my employer I worked past age 65 but then was terminated without notice in December 2013, age 67. My employer offers a cash balance plan, which is a leftover plan from previous re-organizations. In the summary, the SPD states: "Once you have completed three years of vesting service with the Bank or its affiliates, you are "vested", which means you have earned the right to receive a benefit when you retire or leave the Bank or its affiliates. You have the flexibility to take your benefit with you as a lump-sum payment, or if the present value of your pension benefit is greater than $1,000, you can either (a) receive monthly annuity payments, or (b) leave your account in the plan until the April 1 following the year in which you reach age 70 1/2 and continue to earn interest credits." The SPD, in a Benefits Illustration section, indicates that "Rick could receive a benefit at age 60 in a single lump sum or as an annuity. Or, if he prefers, he can let his account remain in the plan and earn annual interest credits until he is ready to retire." The SPD also states, "If you leave the Bank after age 65, you can elect to defer payment until April 1 of the year you reach age 70 1/2". Nowhere in the SPD document is an indication that benefits will be suspended, if you continue to work past age 65. My employer has suspended benefits on August 16, 2011 (my 65th birthday), including interest credits. I likely received a notice at the time, but do not have the document now. My questions are, (a) can an employer suspend interest credits in a cash balance plan, (b) does the suspension end with my termination in December 2013 and am I entitled to interest credits from then onwards, and © can I recoup the lost interest credits if I wait until I am 70 1/2? The plan states benefits in terms of a monthly single life annuity (and several other options), but does not communicate the accrued balance in the hypothetical cash balance account (contrary to the indications in the SPD).