PS contribution for medical benefits

[Guest Lex]

We are considering the following for a client- feedback or more information is welcome.

The company wants to give more to employees to enable them to pay medical costs upon retirement. The company does not want the expense of setting up a defined benefit plan and using 401(h).

The company already has a 401(k)/PS Plan. The current thinking is to:

1) make an additional employer PS contribution- age-weighted

2) designate that as a "retiree medical contribution"

However, insurance would not be purchased with this contribution- it would be invested per participant elections in mutual funds. Upon distribution, a participant would be free to spend the money as they choose.

Any thoughts on restricting distribution from that source until NRA for those that terminate prior to NRA- but allow them to take the 401(k) and other ER contributions upon termination?