QJSA Rules and New BCD

[Guest Hawkeye]

Have a client who has indicated their assertion that a participant can change their elected BCD in the middle of the election period, without requiring a new retirement kit to be sent. As the administrator, not sure we can or should support this.

An example would be:

-Participant contacts administrator on 3/15 and requests paperwork for a 4/1 BCD

-Administrator sends paperwork to participant at least 8 days prior to elected BCD, constituting a successful QJSA notice

-Participant decides not to retire, works two more months and contacts service center on 5/20 requesting a 6/1 BCD

-Administrator does not have enough time to generate and send kit to participant within 8 days of newly requested BCD

-Administrator sends paperwork, but pushes BCD to 7/1 instead of 6/1

Client believes 6/1 BCD should be honored and that no new paperwork is required, even though participant has materially changed original request based on the new BCD.

Is the original paperwork sent with the 4/1 BCD legally invalidated based on new BCD, or is paperwork on file still valid since was sent within last 180 days meaning participant could sign and return original retirement paperwork but use for the 6/1 BCD?

[Andy the Actuary]

Would not use original paperwork since it does not show correct benefit amounts and optional forms. The election packages I prepare show all optional payment amounts as of the intended BCD. The election packages state that either (a) the package is invalid if not returned within the designated time or (b) in the case of a normal or late retirement where the Plan does not provide the right to defer, that payment will made under the automatic J&S if the package is not returned on time.

Generally, allow 30 days for participant to return paperwork and if end of 30 days allows payment in the targeted month, then would wink. I.e., would send out paperwork on June 10 for July 1 payment date and allow for return say by July 20th and so could make payment in July. This is a practical good faith approach without i's dotted and t's crossed. Don't know that anyone will go to pension prison. Nonetheless, I will not be surprised if there is not universal agreement with this approach and if some don't deem me a menace to pension society.

If uncomfortable, then would send paperwork now for August 1 payment date.