28. Benefit increase - fully insured plans, insured preretirement death benefits

Statement of Requirement: Code § IRC 401(a)(4); Rev. Rul. 69-251 , 1969-1 C.B. 127

231 | Defined Benefit Plan LRM Package 08/2020 06/2026

Document Provision: _____

(Note to reviewer: A fully insured plan may provide that the amount of retirement benefit provided by insurance or annuity contracts will not be provided or increased until the participant’s compensation is large enough to provide or increase the retirement benefit by a specified minimum amount. This minimum amount can be no greater than $120 per year or $10 per month. It can also be expressed in terms of an increase in the face amount of the preretirement death benefit under a contract, if the minimum increase in face amount does not exceed $1,000. These minimums are also applicable to insured preretirement death benefits (but not retirement benefits) under non-fully insured plans. Such a plan may require a minimum, not exceeding $1,000, before it will provide or increase an insured preretirement death benefit. For example, if the preretirement death benefit is 100 times the anticipated monthly pension, no more than $10 per month anticipated monthly pension can be required as a pre-condition for insuring that death benefit.)