DB plan with empoloyee contributions

[Guest SuzieQNEC]

DB plan with after-tax employee contributions.

Participant retires 1/1/00, leaves contributions of $25,000 w/out interest, $60,000 w/interest in the plan and elects single life annuity of $500/month which consists of $200 employer + $300 employee portions. $80.65 of each payment is nontaxable for 310 payments.

Participant dies 6/30/09, having received 114 payments. He has received $9,194 in nontaxable, $34,200 in ee portion, and $57,000 in total payments. Would his beneficiary then receive a one-time payment of total ee less total paid to date ($60,000 - $34,200 = $25,800)?

[Guest SuzieQNEC]

I was hoping someone might have some thoughts on how to pay out participant of deceased retiree who did not receive full amt of employee contributions with interest over course of monthly payments. Numbers have been simplified for purposes of posting.

[david rigby]

Would his beneficiary then receive a one-time payment of total ee less total paid to date ($60,000 - $34,200 = $25,800)?

Most plans with EE contributions will have language that answers this question. If your plan does not, check prior versions of the document (just in case it was omitted during a restatement).

I'm not sure, but the plan may state that the minimum total payments s/b $60K.

Although not directly to your questions, re-read IRC 72 (and regulations) to see if anything is relevant (likely).

[rcline46]

It also makes a difference if the contributions were considered MANDATORY or VOLUNTARY contributions. Again, this should be addressed in the document.

[eeyore]

Is this a governmental plan? Most that I have seen do provide a minimum lump-sum at death based on the difference between (a) the balance of the member's contribution account at retirement, and (b) the sum of the payments made. But all these plans have explicit language to this effect somewhere in their ordinances/statutes.

[Guest SuzieQNEC]

In response to inquiries above, it's a private sector plan with mandatory employee contributions.