50. Optional forms of benefit must be stated in the plan

Statement of Requirement: Code §§ 401(a)(4), 411(d)(6); Reg. §§ 1.401(a)(4)- 4, 1.411(d)-4; Notice 97-75, 1997-2 C.B. 337; Rev. Proc. 2017-41R ev. Proc. 2023-37, 2023-51 I.R.B. 1491, sec. 5.169 .03(5)

Document Provision: _____

Sample Plan Language:

The optional forms of benefit provided by this plan are as follows:

(Note to reviewer: The availability of each optional form of benefit must not be subject to employer discretion.

In addition, each optional form of benefit provided under a standardized plan (other than any that has been prospectively eliminated) must be currently available to all employees benefiting under the plan. This is the case regardless of whether a particular form of benefit is the actuarial equivalent of any other optional form of benefit under the plan.

Code § 411(d)(6) prevents a plan from being amended to eliminate or restrict optional forms of benefits and any other "§ 411(d)(6) protected benefits" with respect to benefits attributable to service before the amendment except as expressly provided under Reg. § 1.411(d)-4. See also LRM #60.

Plans subject to the funding standards of § 412 (i.e., money purchase pension plans, including target benefit plans) are required to offer joint and survivor annuities. See LRM #42.).

(Note to reviewer: An employer that decides to eliminate the availability of a preretirement optional form of benefit (defined in LRM 49) for a participant (other than a 5 percent owner) who attains age 70½ after a specified year has relief from the applicable sections of 401(a)(4) under Notice 97-75. An optional form of benefit available to a 5 percent owner at age 70½ and retirement and to other participants only at retirement will be treated as the same optional form of benefit for purposes of testing the nondiscriminatory availability of benefits, rights, and features. Additional relief is provided as stated in Notice 97-75.)

255 | D e f i n e d C o n t r i b u t i o n P l a n L R M P a c k a g e 0 1 / 2 0 2 4