27B. Adjustments for benefits beginning at a time other than normal retirement age

Statement of Requirement: Treas. Reg. § 1.401(l)-3(e)

Document Provision: _____

Section 1. If benefits commence to a participant at a time other than normal retirement age, the participant’s accrued benefit will be multiplied by a fraction, the numerator of which is the annual factor that corresponds to the age at which benefits commence to the participant in the plan’s normal form of benefit, and the denominator of which is the annual factor that

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corresponds to the normal retirement age under the plan in the normal form of benefit.

If benefits commence to the participant in a form other than the normal form of benefit, the product in the preceding paragraph will be actuarially adjusted in accordance with the provisions of section _____ of the plan.

If this plan has had a fresh-start, the limitations in the preceding paragraphs will be applied only to the participant’s accruals for years for which the plan provides for the disparity permitted under Code § IRC 401(l). All benefit accruals for years for which the plan does not provide for the disparity permitted under Code § IRC 401(l) will be actuarially adjusted in accordance with the provisions of section ____ of the plan.

(Note to reviewer: The blanks in the preceding two paragraphs should be filled in with the plan section number that corresponds to LRM #42. See LRM #51 for actuarial increases after age 70½.)

The annual factor is the factor derived from the applicable table(s) below based on the normal retirement age under the plan, as specified in section _____ of the adoption agreement (determined without regard to any years of participation requirement), and the plan’s normal form of benefit, as specified in section _____ of the adoption agreement. If the employer elects as an integration level in the adoption agreement option _____ or _____, Table II shall apply. Otherwise, Table I shall apply.

(Note to reviewer: The first two blanks in the preceding paragraph should be filled in with the adoption agreement section numbers that correspond to LRMs #14 and #41, respectively. The last two blanks should be filled in with the adoption agreement section numbers that correspond to options 4 and 5 of section C of LRM #27.)

(Note to reviewer: Treas. Reg. § 1.401(l)-3(e) requires a reduction in the 0.75 factor in the maximum excess or offset allowance with respect to benefits payable prior to a participant’s Social Security retirement age using factors set forth in the regulations. The tables below incorporate these factors.)

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Table I

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Table II

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(Note to reviewer: The tables above apply the factors derived from the simplified table contained in Treas. Reg. § 1.401(l)-3(e)(3), as applicable to all individuals, regardless of their Social Security retirement age. As an alternative, the plan could apply the three separate sets of factors derived from Tables I, II or III in Treas. Reg. § 1.401(l)-3(e)(3) to participants with Social Security retirement ages of 67, 66 and 65, as applicable.)

Section 1.1. Benefits beginning on or after age 55 and on or before age 70. If benefit payments commence in a month other than the month in which the participant attains the age specified in the foregoing table, the annual factor will be determined by straight line interpolation in the applicable table above.

Section 1.2. Benefits beginning before age 55. If benefit payments begin before the first day of the month in which the participant attains age 55, the annual factor will be the actuarial equivalent of the annual factor contained in the applicable table above for a benefit commencing in the month in which the participant attains age 55.

Section 1.3. Benefits beginning after age 70. If benefit payments begin after the first day of the month in which the participant attains age 70, the annual factor will be the actuarial equivalent of the annual factor contained in the applicable table above for a benefit commencing in the month in which the participant attains age 70.

Section 1.4. A disability benefit, other than a qualified disability benefit, commencing before a participant’s normal retirement age will be treated as a benefit subject to the limitations of this section. A disability benefit is a qualified disability benefit only if the benefit: (1) is payable under the plan solely on account of a participant’s disability, as determined by the Social Security Administration, (2) terminates no later than the participant’s normal retirement age, (3) is not in excess of the amount of the benefit that would be payable if the participant had separated from service at normal retirement age, and (4) upon attainment of early or normal retirement age, the participant receives a benefit that satisfies the accrual and vesting rules of Code § IRC 411 (and the regulations thereunder) without taking into account the disability benefits made up to that age.