In a pair of rulings issued recently, the IRS announced some significant changes impacting qualified retirement plans. Taxand USA discusses this further.
Notice 2015-49 would prohibit the now common practice of allowing annuitants in pay status to elect to receive their remaining pension benefit in the form of single lump sums, while announcement 2015-19 largely eliminates the determination letter program for individually designed plans. Areas discussed are:
Discover more: IRS announces significant changes impacting qualified retirement plans
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Sponsors of defined benefit pension plans may no longer eliminate actuarial risk by allowing annuitants to cash out their remaining annuity benefits. Since this method of reducing risk is no longer available, sponsors of such plans who wish to limit ongoing risk may wish to explore other methods of limiting their risk, including cash balance conversion, conversion to a defined contribution plan, or freezing and/or terminating such plans.