As of July 9, 2015, sponsors of defined benefit pension funds will be prohibited in most cases from offering retirees already receiving pension checks a lump-sum buyout.
Lump-sum buyouts had been permissible under a provision of tax law that only allowed increases to benefit payments.
But the Feds have determined that going forward, the only type of increases allowed will be those made to "ongoing" annuity payments, and not those that "accelerate" those payments, as lump-sum arrangements do.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
