411(d)(6) protected lump sum interest rates.

[Gary]

A plan does not provide a lump sum option, but pays lump sums < 5,000 using PBGC rates. The company is merged w/ another company into a new plan. The new plan allows for lump sums under GATT (includes lump sums > 5,000). Is it reasonable to require that for a participant that was in pre merged plan to say that his pension accrued at time of merger must preserve the PBGC rates for his lump sum (even though a lump sum was not an option, except for small pensions)?

[Guest]

I think a participant can "say" anything he or she wants, but the surviving Plan has no legal obligation to grandfather any provisions that didn't exist.

Since the surviving Plan now provides for a lump sum, which was not previously an option, it should be treated as a new benefit option.

Therefore the provisions that only applied to lump sums 5,000.

I could also argue that depending on the timing of the merger, there is no obligation to preserve the PBGC rates on lump sums of