FICA wages used for SSLI payment option

[Guest nic]

I'm working with a pension plan that includes a social security level income option form of payment. This provision is an old grandfathered optional form of payment, and, you guessed it, I don't have access to that prior plan document.

What I need to know is - does 'the law' require that we give the participant the right to submit either actual FICA wages or a copy the Social Security Award letter to use in calculating the optional form of payment?

Thanks.

[RCK]

I don't think that you are encumbered by the "law" on this. Since you don't have access to the old plan (and assuming that you can't figure it out from earlier benefit calcualtions), you're going to have to "make up" a rule.

Since you will be providing an actuarial equivalent benefit, it does not matter very much. If it were my plan, I'd tell the participant that we would base benefits on an estimate of SS benefits, and that if he wanted his benefit based on actual SS benefits, he would have to provide an entitlement letter before we initiated benefits.