jwb0323

A plan allows lump sums. Early retirement is defined as 55&10 and provides subsidized early retirement factors. A participant who is 40 but has 10 years of service wants to retire and take a lump sum, so we are calculating the annuity available at BCD. Do you have to provide the early retirement reduction factors and then actuarial equivalence reduction thereafter? In practice, we do that for plan terminations but this is not a plan termination and the plan document doesn't state to do this. Thanks!

What about just calculating the benefit earned after the lump sum payout only ?

The plan document states to reduce the benefit determined based on total service and pay by the actuarial equivalent of the lump sum payment recieved. The lump sum was paid out in 2000. When we determine the benefit under the current formula, the lump sum paid out is greater than what the lump sum would be now, so no benefit is due.

What if the prior benefit was determined using a different benefit formula?

I am the actuary. It is a traditional DB plan. I am working on getting the accrued benefit that was used when determining the original lump sum. The records are hard to get because the plan was taken over a few years later and older benefit calculations and/or plan documents are hard to find. My initial thinking was to get the original annuity benefit and reduce using that. Thank you,

I have a participant who worked, termed, took a lump sum, but was then rehired. The plan docuemnts says that for benefits for someone who took a lump sum you use all service and then reduce that amount for the actuarial equivalent of the lump sum. 1) What happens if the benefit we calculate for this person using post lump sum payout service is greater than the amount we would get if we use total service and deduct the lump sum? 2) If the lump sum was paid out in 2000, do we have to go back to 2000 and figure out the AE definition at that point to redice the annuity? Or, can we simply take the lump sum paid out and reduce the current benefit? Or, take the annuity benefit and convert to a lump sum using current assumptions? Thanks,