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ARTICLE · 18 OCTOBER 2016

Final IRS Regulations Simplify Pension Plan Requirements For Partial Annuity Distributions

McDermott Will & Emery
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The Department of Treasury and Internal Revenue Service issued final regulations addressing the minimum present value requirements for pension benefits payable partly as an annuity and partly in an accelerated form, usually a lump sum.

United StatesEmployment and HR
Alan Nesburg, PC
Alan Nesburg, PC
Stephen Pavlick, PC
Stephen Pavlick, PC
David Díaz
David Díaz
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Summary

The Department of Treasury and Internal Revenue Service issued final regulations addressing the minimum present value requirements for pension benefits payable partly as an annuity and partly in an accelerated form, usually a lump sum. With these regulations, Treasury and IRS take another step in promoting lifetime income alternatives for retirement plan participants with simplified calculations for partial annuity payments. 

In Depth

Effective September 9, 2016, the Department of Treasury (Treasury) and Internal Revenue Service (IRS) issued final regulations addressing the minimum present value requirements for pension benefits payable partly as an annuity and partly in an accelerated form, usually a lump sum. These final regulations under the Internal Revenue Code (Code) Section 417(e) aim to encourage pension plans to make partial annuities available to participants who can now elect only lump sums. With these regulations, Treasury and IRS take

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