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Showing results for tags 'Employee-Derived AB'.
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For those of you conversant on contributory DB plans, when an lump sum option exists on the both the employee and employer portion of the accrued benefit, does the accrued benefit portion that is derived from the employee contributions have to be present valued on 417(e) rates too (obviously not less than the contributions with interest) for the lump sum distribution ? or can it be a lump sum where the employee derived portion of the accrued benefit is paid as a lump sum as a refund of the employees contributions (with interest) only and then only the employer portion of the accrued benefit is present valued on 417(e). For example: 1. ER paid accrued benefit present value on 417(e) plus EE dervied AB paid as refund w/interest of contributions = Total Lump Sum -OR- 2. Entire accrued benefit if paid as a lump sum is subject to 417(e) but never less than the employee contributions w/interest (120% of federal mid-term rate interest). Is example 1 above even an option ? I know there are situations where a refund of employee contributions can forfeit the entire benefit (subect to restoration rules) but I'm just talking about a standard termination of employment where a lump sum of the employer provided benefit is also available.
