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Found 4 results

  1. Hello, new here (to the site and the retirement industry in general). Could anyone please help me understand in what circumstances it is permissible to amend to remove an optional benefit? We have a client who purchased two companies via stock purchase and need to merge both subsidiary plans into theirs (messy, I know). There are partial and installment withdrawals in one of the subsidiaries, but we would like the surviving plan to have lump-sum only (with partial and installment only available for RMDs as is standard). It seems like the Code is pretty clear, but I'm just not understand the regs on this matter. Any help you can provide would be much appreciated!
  2. Good afternoon, In a takeover case, the employer would like to do the following in his new document: 1. Annuities are the normal form of benefit in the current 401(k) plan document. The employer maintains that he did not know this, that nobody has ever been offered an annuity nor have they inquired about one, and certainly nobody has ever taken one. He was genuinely shocked to hear that this provision is in is current document. He maintains that they never had a Money Purchase Pension Plan, a Target Benefit Plan or any other plan at all besides the current one, which started life as a profit sharing plan in 1969 and eventually had 401(k) provisions added to it. The incoming account balance report does not have a source where MPP money or related rollovers are being tracked. It would appear that there never was any reason to have annuities as the normal form of benefit. He wants us to take out any reference to annuities and put in lump sum only. 2. Normal retirement age has been plain age 65, and he wants us to change it to the statutory definition of age 65 or the completion of 5 years of service, whichever comes later. Does anybody see either of these changes to the document as a violation of anti-cutback rules? Thank you for your thoughts.
  3. A non-electing church plan wishes to increase normal retirement age for most participants, effective for already accrued benefits. I know the plan is not subject to 411(d)6, so no cutback issue. Any other issues besides potentially upsetting participants?
  4. Plan sponsor will terminate its pension plan in a standard termination. The plan currently has no lump sum distribution option, other than forced cash-outs for small benefits under $1,000, and other cash-outs (e.g., to an IRA) between $1,000 and $5,000. The sponsor wants to add a lump sum distribution option for participants who are not in benefit payment status, to be used in connection with the standard termination. So far, so good. The sponsor, however, wants to specify a lookback month for determining the applicable interest rate to be used in determining the lump sums under the new distribution option that is different than the lookback month used for determining small benefit cash-outs. Is this do-able? Or, does it violate the 417(e)/411(d)(6) rules? Specifically, does it run afoul of the regulations at 1.417(e)-1(d)(4), which provides in relevant part: "The time and method for determining the applicable interest rate for participant's distribution must be determined in a consistent manner that is applied uniformly to all participants in the plan." Would it be OK to get by this issue by "protecting" the participants with small benefits by giving them the benefit of the greater of lump sums determined under the two interest rates. (Everyone else will have a lump sum calculated under the new interest rate.) Thanks!
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