This was originally discussed in October, 2018 when the participant could be said to be at fault for not getting in their application on a timely basis before the window closed.
Now, it's the plan sponsor and/or the vendors administering the window that are at fault.
A sponsor has a calendar year plan and is working hard to take advantage of the interest arbitrage to take GAAP/IFRS gains for lump sums before December 31.
We anticipate that due to the tight time frame remaining in 2019 the trustee will not be able to cut checks in time for payments to be made by 12/31- anytime the week after is more likely due to the plan sponsors inability to verify some vital data before it's processed by the actuary, etc. W.e are roughly talking about 100 people out of 1,000.
With 417e interest rates dropping, a strict application of the governing 417e rules will result in payments that could be significantly higher for these 100, resulting in a PR problem.
Can anyone rationalize the continued use of the 2018 interest rate basis for January 2020 payments?
