Elimination of payment options

[John Feldt ERPA CPC QPA]

A plan with many Life and CC options (some are Life and below 10 years CC and some are Life and over 10 years CC) would like to simplify things. They want to eliminate as many options as possible, without running afoul of 411(d)(6). The plan also has a lump sum option (which almost all particpants take when there's no restriction otherwise stopping them).

Under 1.411(d)(3)©(4), all of the Life and 10 or less is grouped separately from Life and more than 10 forms. Does this mean the plan must keep at least two Life and CC options, such as Life&10 and Life&15?

[Andy the Actuary]

In the past in crossing this bridge we have gone for a D-Letter and in our cover letter indicated that (a) an option is being removed to ease administration, communication, and employee understanding and (b) no one has ever elected the option. The latter point (b) is critical. Then, hope that the request is reviewed by someone who can look beyond the letter of the law. In short, you may be able to reach beyond the arm of 411(d)(6).