Deferred Vested Death Benefit

[Guest kdfox2]

We were recently notified of the death of a deferred vested participant who had terminated in 1979 and who was married at the time of death. The preretirement death benefit from the Plan document in effect in 1979 was the greater of the 5 Year Certain & Life benefit, paid for the guarantee period only, or the survivor portion of the 50% J & S benefit. After calculating the benefits, it appears that the 5 Year C&L benefit is the greater of the two.

Given what the QPSA rules are now, I'm wondering if any of the legislation regarding survivor benefits, such as REA '84, might apply retroactively and that we really should pay the surviving spouse the survivor portion of the 50 JS for her lifetime rather than a benefit for 5 years.

[david rigby]

Yes, REA84 will apply to this plan. One hopes the current plan document has been amended to deal with this.

I think the appropriate references are section 303(e) of REA and Q&A 45 thru 47 of IRS Reg. 1.401(a)-20.