Form of benefit allowed in doc but not at asset carrier

[BG5150]

I have a plan that allows for installment payments as a form of distribution. It says so right there in the SPD, too.

However, the plan is "not priced to allow for installment distributions" at the asset carrier. Therefore, the carrier does not honor such requests.

What recourse does the participant or employer have with the carrier? A benefit is offered in the plan, however, the asset carrier say, nuh-uh. Is it incumbent on the Employer to either change carriers or change pricing tiers with the current one to accommodate these types of distributions? Or amend the plan (going forward) to remove installments?

[david rigby]

It's incumbent on the PA to administer the plan according to its terms. The asset holder has NO say in this matter. If the asset holder won't do certain things, then the PA must change something: either the asset holder or the plan provision(s).

BTW, did the "asset holder" know about this plan provision prior to being engaged?

[BG5150]

It's incumbent on the PA to administer the plan according to its terms. The asset holder has NO say in this matter. If the asset holder won't do certain things, then the PA must change something: either the asset holder or the plan provision(s).

BTW, did the "asset holder" know about this plan provision prior to being engaged?

I don't know. I guess an agent came in and said, hey, we'll do your plan for $x which is 10% cheaper than the other guy.

[Bird]

I think you could either find an insurance carrier to take the money and handle the installments, or convince the participant to roll it to an IRA which is going to pay the installments, or just have him reject the installment payout when he sees the quote. (Unless by "installment" you mean taking a fixed amount or percent and still letting the account fluctuate.)

Also remember that installments can generally be removed in a PS plan.