Granting Service

[Guest Grumpy456]

What rules govern how a plan grants a participant service?

I know a plan can grant participants past service in some cases and even service with a predecessor employer, but what about grants of fictional service?

For example, assume a plan provides a benefit of $50 a month times years of service. When Jim retires, he has 10 years of service, but the plan sponsor wants Jim to get $1,000 a month from the plan, not $500 a month ($50 times 10). So the plan sponsor just decides, on a whim, to credit Jim with an extra 10 years of service in order to "gross up" his benefit. Is such a technique permissible? If so, is such a technique subject to any special nondiscrimination tests?

[Blinky the 3-eyed Fish]

You shouldn't post things twice.

Responders go here: http://benefitslink.com/boards/index.php?showtopic=30662