Ask an Expert - ERISA | The Center for Due Diligence

Q: What impact would major tax code changes have on the retirement plans market?

WAGNER:

Legislative proposals to reduce the federal deficit could have a major impact on retirement plans, participants and retirement plan advisors. Based on tax code rules, employer contributions to qualified plans are deductible to the employer when made, but are not taxable to participants until the contributions and earnings are distributed at which time these amounts are subject to ordinary income tax. Similarly, employee elected deferrals and the earnings thereon escape taxation until distribution. The Code does, however, place limits on contributions to DC plans and the benefits payable to DB plan participants, including 402(g), 415, 401(a)(17), 404 and 401(a)(9).

There seems to be general agreement that retirement plan tax incentives are one of the largest tax expenditures in the federal budget. The details underlying this conclusion are somewhat unclear. The details do not, however, consider the fact that unlike other tax expenditures, the tax benefit derived from retirement plan contributions is not permanent and will ultimately be recouped by the government when the plan distributes the contributions and earnings. Thus, the costs of the current system may be overstated.

Proposals to reform the U.S. retirement system that involve reducing allowable contributions to 401(k) and similar types of plans are made frequently. 401(k) plans are the primary target because they are the prevalent means of retirement savings. Reform proposals may be motivated by policy concerns, such as shifting the demographics of those received benefits from the tax expenditure, or driven by fiscal concerns, such as reducing the budget deficit. Two recent examples of these proposals emanated from the Brookings Institution and the National Commission on Fiscal Responsibility. The first proposal suggested that the tax deductions be replaced with a flat rate refundable tax credit while the Commission recommended a cap of $20,000 or twenty percent of income.

Organizations like the EBRI analyzed PLAN SPONSOR reaction to the proposed changes and concluded that employer contributions would be reduced and many plans would be terminated if the proposals were enacted. Termination is particularly likely for small plans that utilize cross-testing. Proponents of the suggested changes also note that the willingness of employers to offer 401(k) plans would be reduced.

HIGHER INCOME employees would be the group most affected by scaled back contribution or deduction limits, but this group does not require an incentive to save. If plans are made less attractive to this group, Roth options that forgo an immediate deduction, but insulate earnings from taxation, would be more widely used. To the extent that the assets of high wealth households can no longer be fully absorbed by 401(k) plans, Roth accounts or Roth IRAs, the use of tax-exempt bonds and insurance products that temporarily shelter investment earnings from taxation would be increased.

The proposals to reduce 401(k) incentives would affect LOWER INCOME workers in two ways. The reduced limits and other restrictions would impede access to retirement plans since employers would have less incentive to establish or maintain qualified retirement plans. Research has concluded that this group views the tax deductions generated by their contributions as very important and would reduce or eliminate their contributions if the deduction was restricted. In other words, while high income employees would be the most affected economically, they would seek alternatives. On the other hand, low income employees would reduce their total savings.

If the proposals to limit contributions and/or deductions are enacted, INVESTMENT ADVISORS should be prepared for a smaller universe of 401(k) plans as well as reduced contributions. Those advisors providing participant-level advice would be wise to focus their attention on older workers who accumulated career savings before the legislative changes. Younger high income workers disadvantaged by the new system would also be good candidates for increasing their contributions to Roth accounts, Roth IRAs and other tax-advantaged investments outside the world of qualified plans. Given the reduced access and contributions to qualified plans, retirement readiness will suffer, particularly among lower income workers. As a result, investment advisors interested in providing broad-based participant level advice could find their opportunities reduced.

Q: What can a nonprofit plan sponsor do when they know the individual annuity investment products they are using are not ERISA friendly, but the contract provider won't let them out? What is their recourse? Can they use ERISA to get around the contractual restrictions and exit costs?

WAGNER:

Not all 403(b) plans are subject to ERISA. Governmental and church plans are generally excluded. 403(b) plans sponsored by nonprofits can also qualify under a regulatory safe harbor exemption if they are funded entirely through salary reduction and the sponsor's involvement is limited. If ERISA does apply, the plan sponsor must discharge their duties for the exclusive purpose of providing benefits to the plan's participant and beneficiaries with care, skill, prudence and diligence and in accordance with the plan documents. This would include the prudent selection of investment vehicles.

Variable annuity contracts, both individual and group versions, are common 403(b) plan investments. The separate accounts maintained under these contracts are often designed as clones of mutual funds available to the public. The sponsor may or may not have participated in the selection of the annuity contract. Nevertheless, the selection of an annuity provider is a fiduciary act. If the sponsor is a fiduciary under ERISA, the investment options held in the annuity contract must be monitored periodically for performance. This places the plan sponsor, who may have little or no authority over the annuity contract, in a difficult position.

If, after review, investment options are found to be faulty, the sponsor should contact the carrier and request that employees be barred from making new investments. If the carrier is unwilling or unable to implement this request, the plan sponsor has the ability to cease making contributions to the entire contract. The contract would then become a legacy investment and, depending on the sponsor's authority, the funds may or may not be available for withdrawal. Other options will be discussed in detail during the CFDD's 2011 Advisor Conference presentation by Ms. Wagner on: Techniques To Help Advisors Consult To The Fastest Growing DC Plan Market. To the extent that the plan sponsor does not have the power to enforce a withdrawal of funds, it is difficult to see how leaving funds in the contract would constitute a breach of fiduciary duty.

To meet their fiduciary duties, sponsors should create and/or strengthen their investment policy statements to clearly define the investment selection and monitoring process. To reduce liability, sponsors should also consider adopting the standards of section 404(c) of ERISA and ensure that a broad range of investment options are offered. Complying with 404(c) may, however, be difficult in situations where plan assets consist of a collection of individually owned annuity contracts with different vendors. Once an investment selection and monitoring process is established, the plan sponsor should faithfully implement and document the process.

Q: I am an independent registered rep serving 401k plans as broker of record. My compensation is the same on all funds. As part of my service, I use vendor provided questionnaires to help participants make decisions on how to invest in the different options offered by the plan. If they don't complete the questionnaire, I direct them to the target date funds. I also explain the glide path and the amount of equity exposure. Given the services provided, am I considered a participant level fiduciary? In other words, am I providing participant advice? Please note that I do not charge anything additional for my participant level services.

WAGNER:

The key to this question is the nature of the broker's activities in connection with the assistance provided to the plan participants. The DOL's current investment advice regulation requires that in order for an adviser to be a fiduciary, advice or recommendations as to the value of or advisability of investing in securities or other property must be tailored to the particular needs of the plan.

The DOL has issued guidance as to the distinction between investment advice that makes one a fiduciary and investment education that does not. Generally speaking, this guidance indicates that charts, graphs and case studies that provide participants with model asset allocation portfolios, as well as questionnaires that enable participants to assess the impact of different asset allocations on retirement income, fall under the category of investment education. This assumes the guidance is accompanied by statements to the effect that other investment alternatives having similar risk and return characteristics may be available under the plan (in which case instructions should be given on where further information can be obtained) and that in applying particular models to their situations, participants are advised to consider their other assets, income and investments in addition to their interests in the plan.

If the questionnaires represent all the vendors whose investment offerings are available under the plan, we can tentatively conclude that by limiting assistance to providing help in completing and interpreting the questionnaires, the broker has avoided fiduciary status. However, this conclusion must remain tentative until we can be certain that nothing has been done that would influence a participant to choose the investments of one vendor over another, since this would constitute an investment recommendation subject to fiduciary responsibility. In other words, the broker may be inadvertently steering participants who fail to complete the questionnaire to particular investment options.

An additional requirement for the imposition of fiduciary responsibility on an investment advisor is the receipt of a fee or other compensation for rendering the advice. The fee may be direct or indirect. Assuming the broker has rendered investment advice of a fiduciary nature to plan participants, the fact that the broker receives a fee from the plan sponsor for plan-level advice with the understanding that participant-level assistance would be rendered would be sufficient to make the broker a fiduciary for any participant-level advice. In other words, it does not may any difference if the broker provides the assistance without an additional fee.

From a compliance standpoint, the broker should ensure that all conflicts of interest are addressed. If the broker is a fiduciary, total compensation must also be levelized. In other words, if any form of the fiduciary broker's compensation is variable, including revenue sharing, the total compensation paid should be used as an offset to the fees received for rendering plan and/or participant-level services.

Q: If an ERISA plan participant independently selects and IAR to manage their retirement account and the sponsor agrees to deduct the IAR’s fee from plan assets, what liability and responsibility does the plan sponsor incur by agreeing to fee deductibility?

WAGNER:

Under Existing Regulatory Guidelines, the sponsor should have no fiduciary liability or duty to monitor the IAR if the participant has total discretion to choose the advisor and if the sponsor plays no role in the selection process. As long as the sponsor does not endorse or make arrangements with the advisor for such services, the regulatory guidelines mentioned above are complimented by Interpretive Bulletin 96-1.

It is, however, less clear as to whether the sponsor should perform gatekeeping activities and set minimum standards for the participant level advisors. Similarly, it is not entirely clear if maintaining a list of participants using an advisor’s services and certifying their identity to a trustee for purposes of fee deducibility would be considered an arrangement with the advisor to perform such services. In other words, while a contrary position could be argued, we can’t be sure if allowing an IAR’s fees to be paid from plan assets imposes fiduciary responsibility on the plan sponsor.

Paying an IAR’s fees from plan assets brings up another set of issues under the Prohibited Transaction Rules. For example, ERISA bars the furnishing of goods, services or facilities between the plan and a party in interest as well as the transfer, or use by or for the benefit of a party in interest, of any assets of the plan. In short, the only way to legally pay the IAR from plan assets would be to meet the terms of a statutory exemption from the prohibited transaction rules that apply to certain reasonable arrangements.” To qualify for the statutory exemption, payments made to an IAR managing a participant account must satisfy three basic requirements: (1) the service must be necessary for the establishment or operation of the plan, (2) the service must be furnished under a contract or arrangement that is reasonable and (3) compensation paid for such services must be reasonable.

The DOL is unlikely to challenge the necessity of providing investment advisory services, but the IAR arrangement must be capable of being terminated without penalty and on short notice to be reasonable. The IAR compensation must also be comparable to the cost of similar services and the 408(b)(2) disclosure requirements must be me. It is not, however, clear at this time who is responsible for determining whether or not the IAR’s agreement meets these requirements.”

The plan sponsor selection of an advice provider is clearly a fiduciary act. As the fiduciary with control over payment for services from plan assets, the sponsor is also precluded from turning a blind eye to IAR arrangements that were selected independently by plan participants. For risk management purposes and to ensure reasonableness, sponsors would be wise to perform due diligence on the IAR agreement regardless of who selected the advice provider. They should also request that a copy of the agreement be provided to the participant.

Unfortunately, determining the reasonableness of the IAR’s agreement does not end the fiduciary questions if the fees are paid with plan assets because the party in interest rules are supplemented by several broad restrictions related to the behavior of fiduciaries. As a plan fiduciary, the IAR may not: (1) deal with plan assets for their own interest or account, (2) engage in any transaction involving the plan on behalf of any party whose interests are adverse to the plan and (3) receive any consideration for their own account from any transaction involving plan assets. In other words, ERISA requires undivided loyalty to the participant. As a result, it is particularly important that the IAR and any affiliates do not receive compensation contingent upon the IAR’s investment choices, including revenue sharing.

Consequently, the question then becomes whether or not the sponsor is required to monitor the IAR’s compliance with such matters. The DOL appears to take the position that a plan fiduciary may be guilty of misconduct if they fail to disclose critical information they possess about an investment advisor. As a result, plan sponsors may wish to review the IAR’s ADV or similar filings and communicate any significant findings to plan participants and beneficiaries.

Q: Is there a difference between a wrapper, wrap document and wrap SPD? Are they all the same or do requirements vary by purpose, i.e., SPD, Form 5500, etc?

WAGNER:

I have never heard the term "wrapper" applied to ERISA documents, but I assume you are referring to either a wrap plan document or a wrap SPD. The documents are different and they have different legal requirements that are designed for different purposes. The wrap document should have all the required legal details for the employee benefit plan while the wrap SPD should be written in simpler terms for the benefit of the average plan participant. The filing of the Form 55500 is yet another with separate ERISA requirements and rules.

WRAP DOCUMENT: All ERISA plans, including health & welfare plans, must by law, be administered in accordance with a written plan document. ERISA, HIPPA and other federal laws require the plan document to contain certain specified provisions. While many employers assume that insurance contracts for fully insured products are written plan documents, they are written to comply with state insurance laws. As a result, they do not contain many of the required or recommended plan provisions that protect the plan, the employer and/or the plan fiduciaries.

A "wrap plan" document is designed to meet plan documentation requirements under ERISA and other federal laws to incorporate all insurance contracts and other relevant documents, such as premium conversion plans, into a single plan. A well written plan document also provides additional legal protection for the employer as well as plan fiduciaries and can simplify plan administration. For example, once a wrap document is adopted, an employer will not only be in compliance with ERISA, it will also document the fact that it is only required to file a single Form 5500 for all of its health and welfare plan coverage.

WRAP SPD: ERISA requires plan sponsors to provide SPDs to participants and beneficiaries. The document must describe the plan in non-technical terms that can be easily understood by the average participant. DOL regulations clearly describe the information that must be contained in the SPD.

Employers often assume that the materials provided by their insurance companies or TPAs qualify as SPDs. Unfortunately, these materials are often missing required and/or important information, including eligibility requirements, COBRA & QMCSO information, claims procedures, the employer's right to amend or terminate the plan and an ERISA Rights Statement. To avoid any potential compliance problems, employers that rely on materials provided by their insurance carriers or TPAs, should use "wrap SPDs." Wrap SPDs enable employers to add required or recommended language to the often extensive benefit descriptions in a certificate of coverage or benefits book to create a complete SPD. Employers that use wrap SPDs can avoid the expense of drafting new SPDs by taking advantage of the materials prepared by the insurer or TPA. In addition to reducing the cost of preparing an SPD, Wrap SPDs minimize errors because the employer can use the existing materials.

Q: Some Fixed Index Annuity carriers offer individual annuities with very attractive Income Riders. If a plan sponsor allowed them as a choice in the plan, but limited them to participants over forty, would this generate ERISA concerns? Additionally, would there be other ERISA issues if the carrier later changed the roll up rate, the payout rate or precluded future sales?

WAGNER:

Annuity income riders typically enable participants to make periodic lifetime withdrawals equal to a specified percentage or a notional account parallel to the cash account, whichever is greater. The notional account reflects the indexed value of the premium payments. Although the withdrawals deplete the cash account, the notional account remains insulated from the financial markets, thus maintaining income security during the annuitant's lifetime. Administrators face potential discrimination if such an arrangement is not available to all participants or if it is made on unequal terms.

The right to a particular form of investment is a distinct right which must be tested for nondiscrimination. There seems to be little question that an annuity income rider would be treated in the same manner as an insurance contract and therefore required to pass nondiscrimination tests relating to their "current availability" and "effective availability" to plan participants.

To pass the current availability test, the annuity income rider must be available to 70% of the non-highly compensated employees. Alternatively, it must satisfy either the ratio percentage test or the nondiscriminatory classification test of Code section 410(b). Moreover, if the interest crediting rate is revised and or available to separate groups, the features should be analyzed re the aforementioned requirements.

If the income rider is prospectively eliminated after a certain date, there may be more leeway. An argument could be made that testing separate rights is not necessary when the income rider is available to all employees, but the terms of the product, rather than the plan, limit availability of a particular feature to a specified group. This position would no doubt be challenged by the IRS. The argument also fails to address the effective availability requirement.

Q: When a plan sponsor amends a plan with 100% immediate vesting and adopts a slower/graded vesting schedule, must the 401(k) plan grandfather existing employees?

WAGNER:

When a plan sponsor amends a plan to change the vesting schedule, three rules generally apply. First, the amendment cannot reduce the vesting percentage applicable to existing employees as of the date the plan is amended, plus subsequent earnings. Second, within a reasonable period after the amendment, the plan must give an employee with three years of service the opportunity to apply the old or new vesting schedule to future contributions. Third, as of the date of amendment, plus subsequent earnings, the plan must apply the greater of the vesting percentages under the old or new vesting schedules to the account balance of all existing employees, not just those with three years of service. In short, when replacing a 100% immediate vesting schedule with a graded vesting schedule, all existing employees are 100% vested in their account balance under the first and third rule. Employees with three or more years of service would no doubt elect to continue with the 100% immediate vesting schedule for future contributions under the second rule. Thus, the plan could apply the graded vesting schedule only to (a) existing employees with less than three years of service and (b) employees hired after the plan is amended. However, the IRS informally - and controversially - interpreted the first rule during 2007 as requiring plans to apply the grandfathered vesting percentage to all existing employees after the plan is amended. In light of the controversial interpretation and the complexity of administering the three rules, some TPAs are encouraging plan sponsors to grandfather all existing employees under the old schedule, and apply the new vesting schedule only to employees hired after the plan is amended.

Q: What planning services can a financial advisor offer with regard to rollovers without running afoul of ERISA when the advisor has a pre-existing relationship with either the plan or the plan participant?

WAGNER:

Where the line should be drawn between services that are permissible under ERISA and those that would result in a violation of an advisor’s fiduciary duty is currently a question on the minds of many people.

Attack on Cross-Selling. The need to find this line arises from the Department of Labor’s campaign to curb the perceived abuses associated with “cross-selling.” The DOL recently defined cross-selling as “using existing clients, plan participants and beneficiaries … to market additional services or products.” The Department believes that cross-selling is particularly prone to abuse when it results in fees being received by an advisor in connection with rollovers to IRAs. The definition of cross-selling and the DOL’s views in this matter were expressed in the preamble to the recently withdrawn investment advice regulations. However, for the most part, the preamble merely restates the position first staked out in the now infamous Advisory Opinion 2005-23A where the Department first articulated its position that responding to participant questions concerning the advisability of taking a distribution or the investment of the amount withdrawn could have fiduciary ramifications.

Advisory Opinion 20050-23A. Advisory Opinion 2005-23A posed three questions, the first of which asks whether an advisor who receives a fee for advising a plan participant on how to invest plan assets or for managing the participant’s account is an investment advice fiduciary. Unsurprisingly, the answer was that a participant level advisor’s directing the investments of a plan made the advisor a fiduciary because of the advisor’s “control” over plan assets.

The second question is the one that has caused all of the uncertainties that advisors now face. It asks whether a recommendation that a participant roll over his or her account balance to an individual retirement account to take advantage of investment options not available under the plan constitutes investment advice with respect to plan assets. The answer was no, because the recommendation to take a distribution did not constitute advice pertaining to plan investments and the recommendation with regard to the investment of withdrawal proceeds concerned funds that were no longer plan assets.

Following this temporary relief, the Department dropped the hammer in the second part of its answer. While the advisor would not be an investment advice fiduciary, the advisor would if they were already a plan fiduciary, still be under the obligations of a fiduciary with respect to the advisor’s rollover recommendations, because the advisor would be “exercising discretionary authority respecting management of the plan.” Under the plan management rationale, the advisor would be subject to fiduciary duties even in responding to participant questions as to the “advisability” of taking a distribution or as to the manner of its investment. The Department went on to point out that if the advisor exercises control over the plan assets so as to cause the participant to take a distribution and roll it into an IRA generating fees for the advisor, a prohibited transaction could result, because plan assets would have been used for the advisor’s benefit.

The third question raised in the advisory opinion was whether a recommendation by an advisor not “connected” with the plan relating to distributions and the investment of distribution proceeds is investment advice or the exercise of control over plan assets, either one of which would make the advisor giving the recommendation a fiduciary. The answer was no, but it still left open the question as to the exact nature of the connection that will get an advisor into trouble. Nevertheless, it is clear that, in the DOL’s view, being a plan fiduciary on some other basis would suffice.

DOL’s Plan Management Theory. The DOL’s reasoning in Question 2 of Advisory Opinion 2005-23A may not be sound. The DOL’s position is that if an advisor has some connection with a plan that makes him a fiduciary, then he becomes a manager of plan assets when he makes any recommendation regarding rollovers and/or their investment. This allows no room for the concept that an advisor may be operating in a nonfiduciary role when engaging in financial planning regarding rollover.

The DOL cited the Supreme Court decision in Varity Corp. v. Howe as the support for its plan management theory. This case involved a plan sponsor that had held meetings and provided materials which misled plan participants about the likely future of their plan benefits. The question, which was ultimately resolved against the plan sponsor, was whether the plan sponsor was wearing its fiduciary hat when it made these communications. While the court approved the finding that the plan sponsor had been acting in a fiduciary capacity, this conclusion was made on the basis of the specific factual context in which the misleading statements were made. This made the case into one of very limited precedential value. In other words, in order to decide whether an advisor is a plan manager, it is necessary to look at the facts and circumstances of each case. You cannot simply impose a blanket rule, as the Department seems to have done, that turns everyone who happens to have a plan connection into a plan manager if he provides financial planning services as to distributions and rollovers.

Let me provide an example of the plan management theory being applied in an overly broad manner. Suppose an advisor provides participant level investment advice to one participant in a very large plan. The advisor is an investment advice fiduciary as to that participant. At some point, a second participant for whom the advisor provides wealth management services, but not plan investment advice, asks whether he should engage in a rollover and the advisor responds with advice. The advisor is a plan fiduciary as to the first participant but has no control over the assets in the second participant’s plan account. It is hard to believe that the advisor should be treated as a plan asset manager, and, hence a fiduciary, with regard to his advice to the second participant. DOL regulations specifically state that an investment advice fiduciary is not deemed to be a fiduciary regarding any plan assets with respect to which the investment advice fiduciary does not have or exercise any authority or control. As illustrated by the Varity Corp. decision, this concept should also apply to plan managers.

Guidelines for Advisors. The legal underpinning of the DOL’s position may be shaky, but that does not diminish the agency’s ability to make life miserable for financial advisors who engage in conduct that the Department deems to be abusive. As already noted, the preamble to the Department’s recent investment advice regulations reiterated the position articulated in Advisory Opinion 2005-23A. Moreover, there have been situations where cross-selling activity has, in fact, been abusive, as in the recent case of Young v. Principal Financial Group.

So how can an advisor protect himself? In my experience, this question is most pressing in situations where a financial advisor has been providing participant level advice to a plan participant who then asks whether he should take a distribution and how they should invest it. Note that in Question 2 of Advisory Opinion 2005-23A, the DOL set up the question so the advisor would be responding to a question about the “advisability” of taking a distribution and the assumption was that the response would be in the form of a “recommendation.”

In other guidance, specifically, the DOL’s interpretive bulletin relating to participant education, the Department has indicated that certain information and materials are not “advice” or “recommendations.” This includes information regarding the terms of the plan, for example, the circumstances under which the plan allows distributions. It also includes information relating to the benefits of plan participation and the impact of pre-retirement withdrawals on retirement income. Finally, the advisor can provide information on the investment alternatives available under the plan, including past and current investment performance, the objectives and risk and return characteristics of the investment and asset allocation models geared to hypothetical individuals with different time horizons. If limited in this manner, there are no restraints on an advisor’s helping and educating the participant. The key is to avoid any reference to a proper or desirable course of action, including the appropriateness of any particular investment option. If an advisor is committed to a hard sell in capturing rollover business, this approach may not work. However, a neutral presentation of investment information is likely to be appreciated and rewarded by many participants.

Note that current DOL guidance does not specifically state whether an advisor can present asset allocation models that are available outside of the plan. Obviously, this would assist the participant in assessing whether they should take a distribution in order to access such investment alternatives. This would be particularly true for a participant nearing retirement if the model portfolios are for hypothetical individuals with a short time horizon. This should not be treated as a recommendation or the giving of advice, provided that the model is accompanied by a statement that other investment alternatives with similar risk and return characteristics may be available and the advisor identifies where the participant may find information on such other investment alternatives. Once again, staying out of trouble requires an advisor to avoid making a recommendation, and the best way to do this is to make a balanced and neutral presentation.

So this is where I would draw the line when a financial advisor is already providing participant level advice to an individual who is approaching retirement. The issues become more difficult, although not insurmountable, if the advisor provides plan level advice, because of the perception of added authority and reliability that this position may entail. But under any circumstance, the fiduciary advisor is not prevented from servicing a plan participant, as long as the advisor limits the information that is presented so as to avoid making specific recommendations while giving the participant the tools to make their own decision.

Q: 401(k) plans often have a provision that allows the sponsor to distribute account balances of terminated employees with balances less than $1,000. Given that many plans have a number of terminated accounts with very small balances, is there some diminutive amount that can be forfeited rather than paid out? Some of these accounts would incur distribution costs in excess of their balance.

WAGNER:

There is no rule allowing for forfeiture of small accrued benefits or account balances. On the other hand, there is no mandatory 20% withholding on amounts valued under $200.

Q: I have a client about to retire and she has a question. Her SPD states: "If you are single when you retire, your normal form of benefit is a ten-year certain & life annuity. If you die before the ten-year period, the payment will continue to your beneficiary (ies) for the remainder of the period." Unlike the benefit for a married individual who has a joint & 50% survivor annuity, the SPD does not state if the benefit would be reduced. How does she find out what her beneficiary would receive if she dies before the end of the ten-year period?

WAGNER:

Simple, have the plan sponsor/administrator ask the plan's actuary what the exact monthly benefit would be under the ten-year certain payment option. If requested, they are required by law to provide that information.