IRS shuts lump-sum window for retirees already receiving benefits

IRS shuts lump-sum window for retirees already receiving benefits
Defined benefit plan sponsors can no longer replace annuity payments with lump-sum distributions to retirees and their beneficiaries.
JUL 01, 2015
Defined benefit plan sponsors can no longer replace annuity payments with lump-sum distributions to retirees and their beneficiaries, the IRS said Thursday. With the amendments applying as of July 9, “it definitely has an immediate impact,” especially for people about to draw benefits, David Levine, a principal at Groom Law Group in Washington, said in an interview. “It definitely restricts the lump-sum windows, which is consistent with all the regulatory agencies' focus on lifetime income rather than lump sums.” (More: A retirement plan from the guy who teaches retirement income planning) Further clarification is needed on how the rule change will affect terminated plans, he said. Hazel Bradford is a reporter at sister publication Pensions & Investments.

Latest News

Mercer Advisors expands in Florida with $1.2B AUM next-gen team
Mercer Advisors expands in Florida with $1.2B AUM next-gen team

It's the mega-RIA firm's third $1B+ acquisition in just three months.

Trump asks bank CEOs to pitch Fannie, Freddie stock offering
Trump asks bank CEOs to pitch Fannie, Freddie stock offering

Wall Street leaders propose ways to monetize the mortgage giants.

Alternative investment winners and losers in wake of OBBBA
Alternative investment winners and losers in wake of OBBBA

Changes in legislation or additional laws historically have created opportunities for the alternative investment marketplace to expand.

Raymond James, Osaic laud new bank partnerships
Raymond James, Osaic laud new bank partnerships

A Texas-based bank selects Raymond James for a $605 million program, while an OSJ with Osaic lures a storied institution in Ohio from LPL.

Bessent backpedals after blowback on 'privatizing Social Security' comments
Bessent backpedals after blowback on 'privatizing Social Security' comments

The Treasury Secretary's suggestion that Trump Savings Accounts could be used as a "backdoor" drew sharp criticisms from AARP and Democratic lawmakers.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.