If a plan only pays benefits from the pension fund (no lump sums or annuity purchases) and the plan will be less than 80% funded based on the 2007 lookback AFTAP, is the employer required to provide participant notices even though in reality there are no benefit restrictions since benefits are only paid from the fund? Thanks.

Bump this question, because I would like to know also.

My understanding is the restrictions also applies to accelerated and some subsidized benefits. So if you offer an unreduced early benefit for someone age 55 w/30 years you have to stop.

Would you please cite what IRS guidance led you to this understanding. Perhaps I'm just being obtuse, but I am unable to extrapolate the defnition of prohibited payment to cover subsidized benefits. The code and regs refer to single life annuity, not the single life annuity which is the actuarial equivalent of the accrued benefit payable at normal retirement date.

Thank you,
andy t.a.

Don't have a cite andy. Speaking with one of our actuaries I believed the rule was no lump sum, accelerated or subsidized benefits if funding < 60% and partial amounts if funding between 60% and 80%