How does DB typically address: retiree dies earlier than expected life expectancy, say, a 66-year-old man died right after retirement age of 65, is there any life insurance type of benefit so that his beneficary can get his deserved retirement income?
Depends on the form of benefit he selected. If single-life annuity, then no. If joint-and-survivor annuity, then the beneficiary (typically a spouse) will continue to receive payment (often 50% of what the employee was receiving).
His entire investment portfolio will be transferred to trust or his relatives as per his will given in IPS (Legal or unique section)
I think the question would have to specifically state it if there was. No product like that is really touched on in the curriculum.
If “DB sponsor provides retiree benefits in the form of life annuities”, can it be “joint-and-survivor annuity” or is it typically single-life annuity?
Unless they specify otherwise, I would assume (during the exam) any DB plan would end with the plan participants death.
Agree with sponge, not really worried because they would have to tell you it a joint and survivor type product.
Seriously doubt this would appear on the exam, but some annuities have a period certain option, where they pay out for a minimum time period even if the annuitant dies. For a cost, of course…
Stay focused people. Get back to the core concepts.
Yeah, don’t we already have enough to remember???
WTF lzhao ?