Timing and survivor rights for vested pension benefits

P/OPINION 75-62


                                                              203


                          July 1, 1975


Dear              :

This is in response to your letter regarding the impact
of ERISA on the rights of plan participants who leave employment
before retirement age.

Your first question is whether a participant who is 100
percent vested has a right to receive his accrued pension
benefits on termination. We don't think so. If the plan
provides for payment of benefits at normal retirement age,
he must wait until he reaches that age.

Your second question is whether a terminated employee could
be treated differently than an employee who voluntarily elects
to retire early. We have referred your letter to the Internal
Revenue Service to answer this question, as section 206(a)(3)
provides for the Secretary of the Treasury to issue regulations
governing this situation.

Your third question is whether a terminated employee with
a 100 percent vested interest in his accrued benefit would
lose it if he dies prior to becoming eligible to receive
his first monthly benefit check. The answer depends in part
on the plan, in part on his age at death, and in part on whether
his surviving spouse has an entitlement to survivor benefits
in accordance with section 205 of the Act. If the plan makes
no provisions for payment of benefits except to a surviving
spouse and he or she dies unmarried and without having made
the necessary election, the benefits would be forfeited.

Sincerely,