Overview: What distinguishes a retirement plan, which is Benefit Focused from one that is Lump Sum Focused (such as the traditional split funded insured defined benefit plan?)  A Benefit Focused Plan provides no distribution or cash out of the lump sum value of the participant’s monthly retirement benefit.  This restriction of no cash out permits the plan: to fund to a more valuable benefit, i.e. a 100% joint and survivor monthly retirement benefit; to provide a death benefit of 100 times the monthly pension until the death of the participant while the surviving spouse continues to receive the participant’s monthly benefit (vs. the traditional split funded plan where the insurance death benefit must end at normal retirement age), and; to protect the value of this benefit from estate tax since there is no distribution of this value (vs. the traditional split funded insured defined benefit with a single life annuity and a cash out at retirement). The fundamental plan provisions of the Benefit Focused Plan, which are backed by IRS letters of determination and include the most recent restatements, are what distinguishes the Benefit Focused Plan from Lump Sum Focused Plan.  They include the following: The Benefit Focused Plan provides   Read more…