Life Insurance Restrictions

[Dougsbpc]

We do not administer any plans with life insurance. However, we may be getting a single participant DB plan with $1M of whole life.

If the participant's projected benefit is $14,500 the $1M should be well within the incidental limit of 100 times the monthly benefit. However, in reading the document it appears both the PV of the QPSA and the insurance proceeds together cannot exceed $14,500 x 100 = $1,450,000.

The document indicates that rollover assets can be used to purchase life insurance with no incidental limit. If this participant rolled over $500k from an IRA to the DB plan, would it count toward his limit? For example, would the limit now be $1,450,000 + $500,000 = $1,950,000.

Thanks.

[AndyH]

Not sure of direct answer but this seems like a terrible idea.

Why would a 1 life DB plan have a QPSA death benefit?

If he dies what is the 415 limit?