Distribution Form Requirements

[MoJo]

A frozen DB plan is now terminating, and for a limited "window" period a lump sum option is being offered. The communications expert (working for the plan sponsor) wants to provide on the distribution paperwork the amount of the lump sum applicable to the participant, but NOT disclose the amount(s) of the normal form of benefit (QJSA) or any of the alternate forms (other annuities, etc.) and only wants to put a general description of normal form and those alternates on the form - requiring the participant to inquire, if they want to know what the annuitized payment stream would be. The comm expert says she doesn't want to "confuse" the participants, nor does she think "anyone in their right mind would select anything but the lump sum" (which, of course, has a more favorable impact on the plan's funding status at termination, costs the plan sponsor less, and which, in my mind is reason enough to have to disclose the values for the other forms of benefit payments).

Other than "it doesn't smell right" and in my mind, it is clearly the much more prudent as a fiduciary to provide all salient information to participants who have to make decision, is anyone aware of any specific authority or requirement for the contents of a distribution request form (other than the tax notice, etc.) that governs the specificity with which alternate forms of benefits need to be described/values provided? I've searched, but haven't found the majic google keywords, nor have I found anything in my ERISA/Code/Regs library.

Thanks.

[Bird]

I think the regs under 1.417(a)(3)-1 give the details (but they generally don't have to be "details" as in actual dollars of the payment stream). I agree with you; it's hard to understand how you couldn't show the normal form of benefit in dollars.

[Peter Gulia]

This is a good illustration of why ERISA ought to require that all fiduciaries, including a plan's administrator, ought to be independent of the plan-sponsor employer.