If a DB plan has standard language for payouts at NRA (no later than 6

[nancy]

If a defined benefit plan has the standard language for payouts at NRA (60 days after close of plan year in which later occurs.....) and a participant does not elect to defer payment of the benefit is it the plan sponsor's responsibility to make payment? If the participant is missing for several years, should back payments be made to the NRD or actuarial increases to actual annuity starting date? The document is silent on what to do if you can't find a participant.

We have been to issuing a notice to participants when they terminat that states that it is their responsibility to apply for benefits when they attain NRD. Now I'm not so sure if that language is appropriate. Does the plan sponsor need to make an effort to find participants? We normally remind them with the annual val who is attaining age 65.

[david rigby]

Some good questions. Are you sure that this participant actually received the notice? That notice should have given (at least) an estimate of the amount of the benefit and also identified NRD.

If the plan/sponsor has done its job of notification, you can't really go dragging the bushes for potential payees. However, you might be facing a situation where the participant is deceased. If so, then you will then be faced with verifying whether there was a surviving spouse.

[Guest]

See Reg. 1.401(a)-14(d) which requires retro payments in this situation. I would also seriously consider paying interest on the "delayed" payments on the notion that a participant's benefit must be nonforfeitable upon attainment of NRA. (The suspension of benefits rules -- where no actuarial adjustment is necessary for late payment -- is an express exception to this general rule.)

[KJohnson]

As a technical matter the reg states that: ...a plan may require that a participant file a claim for benefits before payment of benefits will begin." So as long as your plan states that a claim or application is required I think you are o.k. However, this does not get you around Harry O's point regarding nonforfeitability and the retroactive payment rule. My recollection was that the Ninth Circuit looked at this issue a number of years back.

[Gary]

It would also seem to me to be a good idea to look at the plan provisions w/r/t deferred retirement. Maybe it provides for actuarial increases for commencement after age 65.