DB Plans, Retroactive Annuity Starting Date

[Guest aciepluch]

A DB plan does not provide for the use of a retroactive annuity starting date (RASD) and requires that distributions begin at normal retirement date (65). Plan also requires that participants apply for benefits. If a "missing" participant shows up at age 67, the plan currently calculates the amount of the participant's benefit by using the first day of the month following his 65th birthday as the annuity starting date and pays the participant the missed payments. The plan does not pay interest on the back/missed payments.

Does this practice constitute use of a RASD under the Section 417 regulations? (If so, I know what to do.) If not, should the plan be paying interest on the back amounts?

Thanks.

[SoCalActuary]

Also, does the retroactive payment get compared to the allowable annuity benefit under IRC 415? Does it exceed hi 3 average pay or the dollar limit for retirement age?

You should also consider whether you are expected to issue a notice that benefits not claimed may be subject to forfeiture.

to answer your basic question, it seems to be a duck, it walks like a duck, it talks like a duck. I would say it's a retroactive payment covered under the rules.