411(d)(6) protection - applicable to in-service?

[John Feldt ERPA CPC QPA]

Under §1.411(d)-3(g)(6)(i), the term early retirement benefit means the right, under the terms of a plan, to commence distribution of a retirement-type benefit at a particular date after severance from employment with the employer and before normal retirement age (emphasis added).

If a PS plan has an in-service distribution option at age 55, can this be amended to age 59.5 for all existing balances without violating 411(d)(6)?

[david rigby]

IMHO, no. The plan participant has a right to a particular benefit at a particular point in time. 411d6 applies.

[John Feldt ERPA CPC QPA]

I am of the same opinion, but after a very brief limited search for a code/reg/otherwise that confirms this, I took the Benefitslink shortcut to ask. I will search further next week.

[masteff]

Or is this one of those things that since I'm not 55+ then you can take it from me, but if Mary is over 55, then you have to let her keep the option (so 4.5 years to age out the option entirely)?

[John Feldt ERPA CPC QPA]

I think this might fall under 411(d)(6) protection under the optional forms section (just a starting point to look into further).

§1.411(d)-4. Q-1: A-1: (3)(b) Optional forms of benefit

(1) In general. The term optional form of benefit has the same meaning as in §1.411(d)-3(g)(6)(ii). Under this definition, different optional forms of benefit exist if a distribution alternative is not payable on substantially the same terms as another distribution alternative. Thus, for example, different optional forms of benefit may result from differences in terms relating to the payment schedule, timing, commencement, medium of distribution (e.g., in cash or in kind), election rights, differences in eligibility requirements, or the portion of the benefit to which the distribution alternative applies.

[Trekker]

In Reg. 1.411(d)-4, Q&A-2(b) - I lost track of the subparagraph and sub, sub, sub section numbers, but it is "(ix) De minimis change in the timing of an optional form of benefit." Seems to say you can only change the timing if the optional form is available within 6 months of the time it was available prior to the amendment.

Not sure if this is on point but thought I'd share.

[John Feldt ERPA CPC QPA]

Very useful, yes - thanks!