social security or early ret supplement as part of accd ben

[Gary]

if a plan provides an early ret supplement payable until retiree reaches age 62 is that considered part of the accd ben?

in other words, the participant took a lump sum and ultimately the question is should the supplement be part of the lump sum?

and if it is part of accd ben then it would follow that it would be part of lump sum.

gary

[MGB]

Yes, it is part of the accrued benefit. No, it does not have to be included in the lump sum.

When a participant elects a lump sum, you only need to commute the value of the normal form of annuity at the normal retirement date. Any other retirement-type subsidies are forfeited.

[Guest Harry O]

I'm not sure your post was very clear. An early retirement subsidy would be part of the accrued benefit but, as MGB states, does not have to be included in the lump sum.

You mentioned social security supplements. These are generally NOT part of the accrued benefit and don't have to be included in the lump sum.

[Gary]

harry and mgb

your responses are excellent. however, can you cite regs, etc. supporting your assessment?

thank you.

gary

[IRC401]

See 1.411(a)-7(a)(1) and ©(4).