MMC Benefits Handbook
The BEP at a Glance
Plan Feature
Highlights
Eligibility
  • You are eligible to participate in the BEP if you participate in the Retirement Plan and your Retirement Plan benefit would otherwise exceed limits imposed by the Internal Revenue Code (IRC) for Tax-Qualified Plans.
How the Plan Works
  • The BEP is designed to restore the benefits you cannot accrue under the Retirement Plan due to limits imposed by the IRC. As such, the BEP benefit is the difference between your Accrued Benefit determined under the Retirement Plan when the IRC limitations are applied and the benefit that you would have accrued under the Retirement Plan if the IRC limits were not applied. Because benefit accruals were discontinued effective December 31, 2016 under both the Retirement Plan and the BEP, you cannot accrue any additional benefits under the BEP on or after January 1, 2017.
  • The BEP benefit is determined through a three step process. The first step calculates the benefit that would be payable under the Retirement Plan without regard to any benefit limit imposed by the IRC. This is called the Formula Benefit. The second step calculates the benefit that would be payable under the Retirement Plan when the IRC limitations are applied. This is the Retirement Plan Accrued Benefit. The third and final step subtracts the Retirement Plan Accrued Benefit from the Formula Benefit. The result is the BEP Benefit. See "How the BEP Works" for details.
When You Become Vested
  • You will have a vested accrued benefit after completing 60 months (5 years) of Vesting Service or if you have attained age 65, provided you have completed at least one year of Vesting Service and are employed by a company in Marsh & McLennan Companies' World-wide Controlled Group.
Time and Form of Payment Under Section 409A
Section 409A governs the time and form of payment of non-qualified retirement plans such as the BEP. Generally, a BEP benefit that was accrued or vested after 2004 or a BEP benefit that is paid in a form of payment first made available under the plan after October 3, 2004 is subject to Section 409A (409A BEP Benefit). The following distribution rules apply to your 409A BEP Benefit:
You must incur a Separation from Service in order to commence a vested 409A BEP Benefit. See "Separation from Service."
Separation from Service due to a reduction in hours or extended leave of absence:
Separation from Service Due to a Disability:
  • If you incur a Separation from Service due to a disability, the 409A BEP Benefit will commence in the calendar month following the later of the month in which you (i) separate from service or (ii) attain age 65. See "Separation from Service Due to Disability."
Separation from Service Due to Death:
  • If you die before attaining age 50, while actively employed and before your vested 409A BEP Benefit commences, your 409A Survivor Benefit will commence to an eligible surviving Spouse or Domestic Partner in the month following the month in which you would have attained age 55.
  • If you die on or after attaining age 50, while actively employed and before your vested 409 BEP Benefit commences, your 409A Survivor Benefit will commence to your eligible surviving Spouse or Domestic Partner in the month following your date of death. See "409A Survivor Benefit If You Die While Actively Employed."
  • If you die after terminating employment and before your vested 409A BEP Benefit has commenced, your 409A Survivor Benefit will commence to your eligible surviving Spouse or Domestic Partner in the month following the later of your date of death or the date you would have attained age 55. See "409A Survivor Benefit if You Die after Termination of Employment but before Commencing a 409A BEP Benefit."
Payment Options
  • If your vested 409A BEP Benefit is deemed to be a small benefit under the BEP's small benefit rule for 409A BEP Benefits, it will be paid in a single sum.
  • A vested 409A BEP Benefit that is not deemed to be a small benefit is paid as a monthly annuity. You select the annuity payment form you want at the time your benefit "first" commences. See "How Benefits Are Paid" and "Payment Form Options" for details.
Taxes on 409A Payments
  • A 409A BEP Benefit is subject to federal, Social Security, and federal, state and local taxes, as applicable.
  • If the IRS were to determine that a payment made to you from the BEP or another non-qualified arrangement aggregated with the BEP under Section 409A aggregation rules, is not compliant with Section 409A, you could be subject to immediate taxation, interest charges and a 20% tax penalty on all aggregated unpaid non-qualified plan benefits subject to Section 409A.
  • See "How 409A BEP Benefit is Taxed" for details.
Grandfathered Benefits Subject to Prior Rules
  • The Company chose to grandfather a BEP benefit that was accrued and vested prior to January 1, 2005, provided it is paid according to a plan term that was in effect on October 3, 2004. Grandfathered BEP benefits are not subject to IRC 409A's rules governing the time and form of payment. However they are subject to the tax rules that were in effect prior to the implementation of IRC 409A.
  • Generally, the Grandfathered BEP Benefit will pay at the same time and in the same form that you elect under the tax-qualified Retirement Plan. See "Grandfathered BEP Benefit" and "Annuities Purchased Prior to 2003."
  • If your Grandfathered BEP Benefit is deemed to be a small benefit under the BEP's Small Benefit Rule for grandfathered BEP benefit, it will be paid in a single sum.
  • Participants might be able to elect to have all or a portion of the Grandfathered BEP Benefit paid in a single sum. See "How Grandfathered BEP Benefits are Paid."
  • If Marsh & McLennan Companies purchased an annuity contract for all or a portion of Grandfathered BEP Benefit accrued prior to 2003, the annuity contract will pay in the same form of annuity payment you elect when you commence your tax-qualified Retirement Plan benefit. You may not elect a single sum payment for this portion of your Grandfathered BEP Benefit. See "Annuities Purchased Prior to 2003."
Grandfathered Survivor Benefit –Death Before Commencement
  • In the event of your death while actively employed and before attaining age 50, a Grandfathered Survivor Benefit, will commence to your eligible surviving opposite-sex Spouse in the month following the month in which you would have attained age 65. However, your eligible surviving opposite-sex Spouse may elect to receive a reduced benefit as early as the month following the month you would have attained age 55. See "Grandfathered Survivor Benefits."
  • In the event of your death while actively employed and after attaining age 50, a Grandfathered Survivor Benefit will commence to your eligible surviving opposite-sex Spouse as soon as administratively practical after your death. See "Grandfathered Survivor Benefits."
  • In the event of your death after termination of employment a Grandfathered Survivor Benefit will commence to your eligible surviving opposite-sex Spouse in the month following the month in which you would have attained age 65. However, your eligible surviving opposite-sex Spouse may elect to receive a reduced benefit as early as the first of the month following the month you would have attained age 55.
  • Your eligible opposite-sex Spouse must apply for the 409A Survivor Benefit following your death. See "409A Survivor Benefit if You Die after Termination of Employment but before Commencing a 409A BEP Benefit."
Taxes on Grandfathered Payments
  • A Grandfathered BEP Benefit is subject to Social Security and federal, state and local taxes, as applicable.
  • The entire FICA tax obligation on the Grandfathered BEP Benefit that is not secured by a purchased annuity will be satisfied at the time when the benefit commences. A single sum distribution sufficient to satisfy the entire FICA tax obligation on your Grandfathered BEP Benefit as well as income tax on the portion of your Grandfathered BEP Benefit distributed to satisfy the FICA obligation is made from your Grandfathered BEP Benefit and remitted to the appropriate tax authorities. No further FICA tax will be due on your Grandfathered BEP Benefit.
  • Payments from the BEP other than payments from purchased annuities are taxed as ordinary income when they are received. Generally, state and local taxes, if any, are withheld based on your state of residency when you receive payment.
  • If all or a portion of your payments are derived from a purchased annuity(ies), the Company paid the taxes on the annuity when it was purchased and therefore a portion of your benefit derived from the purchased annuity is not taxable to you when benefits are paid. You are responsible, for taxes on the portion of your benefit payment that derives from the growth in the value of the annuity contract since it was purchased.
Funding
  • With the exception of any payments that are made from annuities purchased from various insurance companies prior to 2003, benefits under the BEP are paid from the Company's general assets. See "Annuities Purchased Prior to 2003" for details.
Contact Information
Plan Administrator – Benefit Equalization Plan
c/o Global Benefits Department, 3rd Floor
Marsh & McLennan Companies, Inc.
Waterfront Corporate Center
121 River Street
Hoboken, NJ 07030-5794
This section addresses your BEP benefit. Marsh & McLennan Companies reserves the right to make changes to the operating rules under the BEP as Marsh & McLennan Companies may determine, in its sole discretion, are necessary.