A Puzzle - need a site or reference as well as your opinions - PLEASE

[Erik Read]

Okay - so it's Friday afternoon, and I'm ready to stump or try for the weekend. I'm looking forward to the replies on Monday.

We have a situation in a DB Plan, where the member/participant has deceased, and now, after auditing the employer's hour reporting, we discovered a discrepancy that is more than 2 years old (hypothetically, let's say the participants DOD was 11/1/04 and the amended hours reported due to the audit were for the 2001/2002 plan year).

While we have the ability to recalculate the pension amounts, is there a compelling argument or ERISA regulation (cite please) that states we MUST recalculate their benefits and pay there estate or, in the event we still have the spouse in pay status to increase that benefit? Our preliminary review shows that perhaps on the high end we owe the estates between $20 and $100 total.

Thanks for the 2 cents and IMHO

[saabraa]

I like stumpers here and there, but let's go with the 5 second shot for this one. How about the IRS's anticutback rule at IRC 411d6? On the other side of the coin, I wouldn't expect many agents taking issue with this situation.

[Erik Read]

Okay - I can strech 411d6 - but is that not more specific to amendments, I'm not reducing a benefit nor an accrural, just adding to the number of hours that count...(open can of worms here).

Let's suppose then - one specific example, not a hypothetical - Retirement Effective Date 03/01/00, DOD 01/08/02 - SLA benefit - Balance of the 60 months were not paid as there was no surviving beneificary. Audited delinquent hours reported in the 1992/93, 1993/94, 1994/95 & 1995/96 Plan Years. Estimate that $43.35 is owed to the Estate.

My opinion we have no ERISA obligation to provide this.

[saabraa]

Can't say much about ERISA, but will throw out another idea from IRS. How about the generic "not following the terms of the plan?" This may be the most popular assertion for potential disqualification for an operational issue (distinguished from plan document failure), but I never did figure out where it comes from. I mean, other than reg. 1.401-1a2, which talks about a plan being a definite written program.