Benefit Form

[Guest Richard Scheer]

Is it legal for a DB Plan to have different forms of benefit based on years of service?

For example, if a participant has less than 15 years of service his benefit is based on a Straight Life Annuity, but if a participant has 15 or more years, his benefit is based on a 10 Year Certain and Life Annuity.

[david rigby]

Hmmm. Never thought about that before. It clearly blows any possibility of safe-harbor. Probably would have to be tested under the benefits, rights and features portion of the non-discrimination regs.

[Guest Richard Scheer]

For what its worth, this is a multiemployer collective bargained plan so any discrimination issues will pass automatically

[david rigby]

In general, (to oversimplify) the reason that you can or cannot do something in a qualified plan is whether it might violate one of the numerous "non-discrimination" portions of the statutes, such as 415, 401(a)(4), etc. If none of those are "at risk", then you should be able to design whatever plan you want. After all, the non-discrmination issues do not address discriminating among the NHCE group.

[RCK]

I agree with pax. Based on the facts, this would not be a discrimination issue.

It certainly could become a communications, actuarial valuation, or HR issue.

And, no, I am not changing my user name from RCK to "I agree with pax."

[david rigby]

OUCH!