Really stuck on this benefit calculation for a while.

The plan sponsor has decided to pay an involuntary cashout to a terminated participant aged 60 years with 5 years of service who is 100% vested.

The plan document says that early retirement eligibility is completion of 55 years of age with 10 years of service. The early retirement reductions are stated age-wise. No separate information(reduction) for TV's who start collecting annuities before age 65 mentioned in the plan document

So do I reduce the accrued benefit for this particular TV based on early retirement factors or is he not eligible for early retirement(due to insufficient service)? Or should the accrued benefit not be reduced at all since it is a forced cash-out?

If he had completed 10 years of service would he then be eligible for early retirement?

Alternatively if he was currently aged 40 years then would his accrued benefit be reduced actuarially?

Sorry for the numerous queries, just want some basics clarified.

Thanks a lot in advance

It sounds as if you need a vacation. Early retirement is not an issue. The lump sum would be the present value at age 60 of the accrued benefit payable at age 65.

What is meant by your words "The plan sponsor has decided to pay an involuntary cashout to a terminated participant aged 60 years with 5 years of service who is 100% vested." Where is the decision? The Plan either does or does not provide for involuntary cashouts.

That's a very small accrued benefit. Are you sure it's under $5K?