Conditioning Pension Benefits on Good Health of Participant

[Guest jmc51]

Does anyone know of guidance on the issue of whether a defined benefit pension plan may permissibly condition the receipt of optional forms of benefits (i.e, forms of benefits other than the QJSA) on the good health of the participant at the time of election? The good health requirement is enforced by subjecting the participant to a medical examination.

Here's an example- what if the plan was to say something like this:

"In addition to the QJSA form of pension, there are other options available to you. Your spouse's consent is required for any of these options. In the case of each of the following, you must be in good health at the time of your application or have chosen the options at least 12 months before the effective date of your normal pension. If you do not elect one of the following optional ways to receive your pension at least one year before the effective date of your pension, you will most likely be asked to take a medical examination. The optional forms of payments are....."

Lets assume the participant has the ability to choose an effective date.

Any thoughts are appreciated.

[Peanut Butter Man]

What happens if the medical examination finds the participant not to be in good health?

[david rigby]

Duplicate post.

http://benefitslink.com/boards/index.php?showtopic=35907

[Guest jmc51]

What happens if the medical examination finds the participant not to be in good health?

I mistakenly listed this under DB plans- but the answers there may not apply because it is a multiemployer plan. sorry about the double post.

[Guest jmc51]

What happens if the medical examination finds the participant not to be in good health?

The participant has to either select the normal form of benefit (QJSA if married or life annuity if single) OR postpone the effect date of its pension 12 months.

[Guest mjb]

In other words the plan will retain the actuarial gain if the ee dies prematurely. This could be a BRF issue if only NHCEs have the LS rights restricted or age discrimination if only employees over 40 are affected.

By the way how is good health defined?

[Guest jmc51]

In other words the plan will retain the actuarial gain if the ee dies prematurely. This could be a BRF issue if only NHCEs have the LS rights restricted or age discrimination if only employees over 40 are affected.

By the way how is good health defined?

Good health is not defined- that raises an issue that this condition may not be an objective standard but rather imperssible Trustee (employer) discretion under the 411 regs. Only NHCE's participate in the plan and all participants would be subjected to the standard. Nevertheless, eliminating the good health standard and leaving in the 12 month waiting period (an objective standard), such that the plan would not be obligated to pay benefits until after effective date, may address the age discrimination concerns.