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Defined Benefit Plan Early Retirement Window- Demographic error- whats the correction?


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Guest PALAWYER
Posted

Plan sponsor of DB plan offers early retirement window to HCE's and NHCEs but the people who actually elect to take the window benefits, which requires termination of employment, are mostly HCEs. I now have a demographic error, where the discrimination in favor of HCEs results in the outcome, not the language in the plan. Since affected HCEs are now terminated and this was a precondition to the benefits from the window, what is the correction? Please help me with your thoughts.

Thank you!

Posted

Perhaps I misunderstand your question. It is my understanding that the non-discrimination testing for a window is concerned with who is eligible, rather than who elects.

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.

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