Gary Posted June 15, 2000 Posted June 15, 2000 A cash bal plan defines AB by saying that the account is projected to age 65 at 8%. Then converting the amount to an annuity that is increased each year by the rate of 8%. i.e. a COLA of 8%/yr. The Plan says if a lump sum is chosen, then the account bal at termination is projected at App Int Rate (PBGC rate) and the COLA is the App Int Rate. Can they change the projecting interest rate and the COLA just because the lump sum option is chosen? To me it doesn't seem right. In other words it appears that they are changing the AB, which seems that it s/b the same weather the pension is an annuity or a lump sum payment Any thoughts?
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