Terminated Participant beyond Normal Retirement Age

[YankeeFan]

A terminated participant in a defined benefit plan has attained the plan's normal retirement age (age 65). In accordance with the plan provisions, distribution to a terminated participant must begin no later than the participant's normal retirement date. The plan does not offer a lump sum provision. The available forms of benefit are a single life annuity, a 50% J&S annuity and a 75% J&S annuity.

The benefit calculation has been prepared and the appropriate forms have been provided to the terminated participant. After repeated requests, the participant has failed to return the forms to the plan administrator.

The plan's normal form in the case of a married participant is a 50% J&S annuity. Can the age 65 monthly benefit be paid to the participant without the participant's consent in the form of a joing and survivor annuity? If the answer is yes, would you suggest the 50% J&S annuity or the 75% J&S annuity be paid to the participant? These forms of benefit have been calculated using the spouse's exact date of birth.

If the benefit can not be paid without the participant's consent, what other options are available to the plan administrator. Note that this individual is not lost or missing. The participant just does not care to respond.

[Lou S.]

If the participant and spouse consent, the benefit can be paid in an alternate form of payment. If no consent, the plan must commence paying the plan's normal form of benefit. In this case a 50% J&S annuity.

[Andy the Actuary]

Agree with LS but a good practice would be to give one final written warning about how payment wiill be made. This presumes that other requests were not written and did not articulate the default in writing. Since you have an onry participant, you want all communications in writing. This is a good practice in any event with all participants so there is never any question of how the plan administrator acted.