Death Benefits & REA & Terminated Vested participants

[Guest crosseyetester]

Under the Death Benefit section of a plan document, it says:

...The following participants shall be covered by this section...Each vested participant with an hour of service after the enactment of the REA of 1984, and in the case of a participant who performed no service after the enactment of the REA of 1984, each Participant qualified to elect a qualified preretirement survivor annuity under section 303(e) of the REA of 1984.

Is it possible that a vested participant who terminated prior to the date of that enactment (not sure what date that is), would not be eligible for a death benefit?

[John Feldt ERPA CPC QPA]

Yes, depending on the plan's terms. Participants who terminated pre-REA who wanted their spouse to have a death benefit could have made an election to have the cost of the death benefit deducted from their accrued benefit during the time they were deferred vested terminated (and married). Some plans added this with no charge against the accrued benefit to avoid having to send out a bunch of elections. So this may differ by plan.

It is also possible for some plans to have allowed terminating married participants post-REA to elect (with spousal consent) to not have a death benefit (to avoid the cost of the death benefit from lowering their Accrued Benefit at retirement).

This is old stuff, and kinda sketchy to me, but that's my best recollection. One database I worked on years ago had a table to handle the dates when marriages started and the dates that they ended so the system could correctly determine the "survivorship protection cost" which would be charged against the accrued benefit. It actually got it right once in a while.

[david rigby]

REA: August 23, 1984 (or thereabouts)

If the plan does not charge the participant/VT for the cost of the pre-ret death benefit, I think the answer to the original question is "No".