nancy Posted May 19, 1999 Posted May 19, 1999 If a governmental defined benefit plan is terminating and wants to pay lump sums, are they subject to the 417(e) rates or can they pay at any reasonable rate?
david rigby Posted May 20, 1999 Posted May 20, 1999 My understanding is that govt. plans are exempt from IRC sections 401(a)(11) and 417. Also exmept from sec. 411. My conclusion is that they are exempt from the lump sum minimums under 417(e). BYW, because they are also exempt from 411(d)(6), it may be possible for such a plan to modify its lump sum definition so that the amounts are decreased. However, as Carol Calhoun reminds us often, there may be applicable state statute(s) that could affect either or both of these issues. I'm curious, if the Plan is terminating, is the sponsor filing with the IRS for a determination letter? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
nancy Posted May 20, 1999 Author Posted May 20, 1999 Yes, we are going to file for a determination letter. We are considering adding that lump sums can be paid at the 30 year rate (GATT) plus 1%.
Recommended Posts
Archived
This topic is now archived and is closed to further replies.