Make Up Distributions from a DB Plan (Posted September 22, 2002) Technical Tip 81: The following question and answer were from the IRS Q&A Session at the 2000 ASPPA Annual Conference: If a defined benefit plan fails to begin making distributions to a participant within the statutory period after termination of employment and attainment of normal retirement age, is it permissible to begin paying actuarially increased monthly benefits when proper application is made? Or is it necessary to provide retroactive payments for the "delinquent" period? Response: Either will work if the plan terms allow for deferral. If the plan does not allow for deferral, then make-up contributions will be required. Comment by RLR&C ERISA Attorneys: Code section 401(a)(14) allows a terminated participant who has met the requirements for mandatory commencement of benefits (generally the later of completion of 10 years of participation or attainment of the earlier of age 65 or the plan's normal retirement age) to postpone receiving his or her retirement benefits. If the participant made such an election, then, as IRS states, either actuarially increased monthly payments or makeup payments could be made. If the participant did not make the election to postpone, there would be an operational failure which could be corrected under the IRS voluntary self correction program (SCP), if eligible, or otherwise, under the IRS voluntary correction of operational failures program (VCO). View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.