Xerxes

I would agree that they are clearly independent. But the real question is what "benefit" is measured against the 1% exception. The 50% lump sum benefit or the full value of the benefit? The attorney seems to be arguing the 50% benefit and this seems counter intuitive to me.

Plan is funded between 60% and 80% thus limiting their 100% lump sum option to 50%. A top 25 employee's 50% lump sum is below 1% of the funding target (100% would be above 1% of funding target). The Plan's ERISA attorney is saying this 50% lump sum can be distributed since the 50% lump sum is below 1% of FT. This doesn't seem right since in this case, for example, a plan funded at 78% would allow a 50% lump sum in this situation whereas a plan funded at 82% would allow no lump sum. Thoughts?