Immediately Distributable Lump Sums and QJSA

[stbennet]

Considering a plan with no early retirement provisions, but allowing Lump Sums upon termination. Reading 417(e)(3) and Reg. 1.401(a)-20, Q&A 17, is it still the case that we have to offer the QJSA annuity available immediately if the Present value is above $5,000?

Seems a little counter-intuitive to be offering annuities when there is no early retirement. Has there been any update or guidance on this?

[AndyH]

If you offer the lump sum over 5K, you must also offer annuity options.

[Effen]

Agree, but you only have to offer the QJSA & QOSA ... and your document has to allow for it.

[AndyH]

Effen, I would agree that technically all the available annuity options need not be offered if the document so provided, but I would think that the life annuity option would - isn't that actually considered the QJSA for an unmarried person?

[Effen]

Yes, I agree. The life only would be the QJSA for a single person, but you don't have to offer it to a married person unless your doc requires

[stbennet]

Yes, I agree. The life only would be the QJSA for a single person, but you don't have to offer it to a married person unless your doc requires

I thought I remember reading that while the Life Only is the QJSA for an unmarried person, it isn't necessary to offer it when you're offering some other immediate distributable benefit.

Are you saying you'd offer an unmarried participant with an available Lump sum over $5,000 a life-annuity regardless of his retirement eligibility?

[Mike Preston]

Absolutely.

[AndyH]

As a practical matter, how many documents have different annuity options for different distributable events?