QUESTION: My plan has three pre-retirement death benefits when the participant is eligible for early retirement. The benefits are:

Payable when	Amount of benefit	Optional Forms
The spouse is the  beneficiary	100% of the amount to which the spouse would have been eligible  had the participant terminated employment on the day before death  and selected the 100% Joint and Survivor Annuity.	• Single life annuity   • lump Sum
There is a beneficiary but  it is not the spouse	50% of the amount, payable as a 10 year-certain annuity, to which  the participant would have been eligible had the participant  terminated employment on the day before death and had selected  the 10 year certain and continuous option.	• 10 year certain  • lump sum
There is no beneficiary	The amount payable to a non-spouse beneficiary (10 year Certain) as  a lump sum.	• lump sum

 
How should I set these benefits up?

ANSWER: Set up two death benefits:

1.     First death benefit:

• Contingency is death payable to spouse beneficiary.
• Benefit formula computes the spouse's amount in annuity form by multiplying:
  • the participant's benefit (in normal form)
  • early retirement factor
  • conversion factor that converts the normal form to the 100% joint & survivor form of benefit
• Payment forms are the following:       
  • Life Annuity -  for conversion from normal form, 
    • select the radio button N/A: Unreduced normal form
    • check the box to calculate factors using beneficiary's age, sex & mortality
  • Lump Sum -  for conversion from normal form, 
    • select the desired actuarial equivalence
    • check the box to calculate factors using beneficiary's age, sex & mortality
  • 10 Year Certain Only -  for conversion from normal form,
    • select the desired actuarial equivalence

2.    Second death benefit:

• Contingency is death payable to non-spouse or no beneficiary
• Benefit formula computes the lump sum amount for the reduced benefit by multiplying:      
  • the participant's benefit (in normal form)
  • early retirement factor
  • 0.5
  • conversion factor that converts the normal form to a 10 year certain annuity
• Payment forms are the following:       
  • Lump Sum -  for conversion from normal form,  
    • select the radio button  N/A: Unreduced normal form
  • 10 Year Certain Annuity - 
    • for conversion from normal form, select the desired actuarial equivalence 
    • for eligibility, make or select an Eligibility Definition where the selection expression only selects a non-spouse beneficiary type