CintiTwo

I assumed this is in part because there still aren't final regulations for the SECURE Act RBD changes. How are plans supposed to operate in compliance with something the IRS hasn't even interpreted yet? In particular, I have not been convinced that plans are prohibited from keeping an age 70 1/2 RBD trigger. Several approved DB plans I work with have an earlier RBD than the Code RBD before the SECURE Act (e.g. month after age 70 1/2 rather than April 1st after). I do not see how the SECURE Act changes the ability to do that, but it is not clear to me what position the IRS is taking. Hoping it will be addressed in the final regulations but if it is mandatory to change to a later RBD, it seems like a stretch to have expected plans to comply with that without guidance.

This occurred to me as well. Participant's sister called plan after his death and said he was not married. This situation would weight against paying him out the difference to the SLA. If the ex-spouse shows up with a QDRO entitling her to QJSA, the plan could possibly be on the hook for that. But as of now, no one has provided an order of any kind.

There is no joint and survivor annuity for non-spouses under the plan. There is only an SLA, and 5-year certain option on the SLA. I hadn't thought about the Code defining a QJSA for a non-married participant as a SLA - that is good point. If he had been paid a SLA, he would have had a bigger monthly payment. It seems to me that the spouse would have to have been a spouse on the ASD, whether because an actual spouse or pursuant to a QDRO. The participant did not remarry after the divorce, so there is no other potential spouse. One concern I have is that there is a QDRO or at least a divorce order touching upon the benefit and no one provided it to the plan. Perhaps that is why the participant listed the ex as his current spouse, thinking that was the way to handle it.

Somehow a participant started his pension on a QJSA without actually being married - he was divorced prior to initiating his benefits and apparently just lied on the application? That participant has now died and the lack of marriage discovered. No payments have been made to the would-be surviving spouse. Any thoughts about how the plan should correct for this, if at all? The plan has not been made aware of any QDRO. It seems to me that the plan is just done now, and doesn't have any obligation to pay out the difference between what his SLA would have been and what the QJSA was.

Thanks - I have a plan considering an amendment to address the issue and so wondering what people have done. With the escrow idea, it would be uniform for all distributions until the investment allocation is complete at the end of the year. Quarterly allocations can still be "gamed" so the plan desires some sort of method for true-up after the annual valuation. It seems such amendments should be addressed in anti-cutback guidance, but I do not see anything

I have heard of plans which only have annual valuations holding a certain percentage of plan-year distributions in escrow until the next valuation date, at which time the escrow can be released after adjusting for gains or losses during the period between valuation dates. Has anyone seen any official IRS word on such procedures?