Annuitizing Employee Contributions

[Guest kjcurly]

A plan has mandatory employee contributions, which will be returned to employee's beneficiary at his/her death if any remain. Normal form of benefit is 50%QJSA or single life annuity. Does anyone know how the employee contribution portion is credited against the annuity payments? Is the employee share "used up" before employer amounts are used? Or is essentially each payment pro-rata employer/employee, as taxable under Sec. 72 to the employee? This question has come up relating to possible overpayments under a plan.

[Everett Moreland]

The answer depends entirely on what the plan document states. Most of the governmental plan documents I've read reduce the death benefit by 100% of the annuity payments, but I have read some governmental plans that use the pro rata approach for a particular form of annuity.

[Everett Moreland]

To supplement my earlier reply, I don't know the context of your question, so my reply might not be relevant to your question. My reply was to the question of how to compute the death benefit.