JARichardson Posted March 20, 2018 Posted March 20, 2018 I have a traditional DB plan that is terminating. Lump sum was only available at retirement age and now it is available to all for the plan term. When we calculate the PVAB for anyone at ERD we base it on the benefit payable on ERD. We are calculating the PVABs for the 6088 and have discovered that due to the current segment rates the PVAB of the NRD benefit is higher than the than the PVAB of the benefit at ERD. Has anyone run into this? The document really doesn't address it. It makes a $130K difference in the termination distribution amounts. How will the PBGC expect us to calculate it?
FAPInJax Posted March 21, 2018 Posted March 21, 2018 Well, the first question is whether your document permits the payment of the early retirement benefit as a lump sum. Many documents do not which means the lump sum is always equal to the present value of the accrued benefit payable at normal retirement age.
AndyH Posted March 21, 2018 Posted March 21, 2018 Doesn't it always need to be at least equal to the pv of the ab at nra to satisfy 417(e)?
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