Pension Plan Summary Plan Description
10.4 Lump Sum Death Benefit
An optional lump sum death benefit may be paid to your beneficiary if you die either (i) after the pension start date of a Normal Pension, Early Pension or Disability Pension, or (ii) before commencing your pension, but after you have earned at least 4,000 hours of Pension Credit since any prior Permanent Break-in-Service. Any lump sum death benefit that is paid to a spousal beneficiary will reduce the value of the pre-retirement survivor annuity (potentially to zero) by the value of the lump sum payment.
The amount of the lump sum death benefit is limited to the amount of contributions paid on your behalf to the Plan since any Permanent Break-in-Service, minus any benefits you, your spouse and any Alternate Payee under a Qualified Domestic Relations Order (see Section 13.6) have received or are entitled to receive from the Plan. If Plan benefit payments paid or payable exceed the amount of contributions paid on your behalf to the Plan, the lump sum death benefit will be zero.
If the value of pension obligations payable after your death do not exceed $5,000, the benefit will be paid in a lump sum. The latest date that a lump sum death benefit can be paid out is the last day of the fifth year that begins after the date of the Participant's death, except that a spousal beneficiary may delay the distribution until the last day of the year in which the participant would have attained age 73.
Lump sum death benefits may qualify for rollover treatment under the federal tax rules. A rollover is a payment of Plan benefits to an individual retirement arrangement (IRA) or to another qualified employer plan with the effect that income taxes are deferred until they are later distributed. Additional information on rollovers will be provided by the Plan Office in the election materials provided to the beneficiary. The beneficiary of a lump sum distribution should consult with a tax advisor if they have any questions about the rollover rules. The Plan Office cannot provide tax advice.
The surviving spouse of a deceased Participant may disclaim the entire single sum death benefit that the spouse would otherwise be paid so that the benefit will instead be paid to the individual(s) who would receive the benefit had the surviving spouse predeceased the Participant. The surviving spouse has no power to decide which other beneficiary will receive the benefit; it will be paid to whomever would receive it had the surviving spouse predeceased the Participant. Only the single lump sum death benefit can be disclaimed, and all of it must be disclaimed if any is. Additional payments under the survivor annuity benefit cannot be disclaimed. The disclaimer must be completed on forms provided by the Plan Office, and must be notarized and returned to the Plan Office within nine months of the Participant's death. Contact the Plan Office if you need disclaimer forms.