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pension plans
Feb 26, 1998

Dear Lynn Franzoi,

Bell atlantic signed an agreement with cwa union saying they

would cash out in lump sum anyone retiring on a vested,service,or disablilty

pensions.They are saying that was a mistake they meant to exclude disabilty

pensions.The money is coming out of the Bell atlantic pension every month.

I know this is a very odd problem.I think this has to be a ADA violation.

Thanks for your input ,

Tema

Response from Ms. Franzoi

In order to respond to your question, I would need more information. Since you are referring to a payment of benefits from a pension plan, you would first have to look at the terms of the plan and what is allowable. A pension plan can provide for a lump sum distribution in lieu of a monthly benefit. However, if the value of the benefit is greater than $3,500 ($5,000 eff. 1/1/98), the plan must have the participant's consent to pay out the benefit in a lump sum instead of as an annuity. It is permissible for a plan to have a different form of payment for a terminated vested participant or a retiree than a disability retiree. Once again, to determine the legality of this, you would need to look at the plan provisions.

Lynn Franzoi



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