1. Relief for certain closed or "soft-frozen" defined benefits plans: The Act provides nondiscrimination testing, minimum coverage, and related relief for certain closed or "soft-frozen" defined benefit plans. The relief permits existing participants in such plans to continue accruing benefits without violating these testing requirements. This affects only defined benefit plans that were closed or frozen before April 5, 2017, and those that satisfy other detailed requirements.

This is optional but effective immediately, and this change may be particularly helpful for "soft-frozen" plans with older, more highly compensated participant demographics.

2. Reduction in age for in-service distributions: Another portion of the legislation that included defined benefits plans is the provision that reduces the age at which in-service distributions may be taken from defined benefit, money purchase pension, and governmental 457(b) plans. Such distributions now may be taken at age 59½ — rather than 62 for pension plans and 70½ for governmental 457(b) plans.

Defined benefit plans, money purchase pension plans, and governmental 457(b) plans have this option for plan years beginning on or after January 1, 2020.

If chosen, modify notices and request forms appropriately

This change was designed as a revenue generator in order to offset the cost of other changes made by the legislation, and although plan amendments are not immediately required, employers choosing to offer the earlier distribution option should modify participant notices and distribution request forms appropriately.

Greg Ash is a partner at Spencer Fane LLP in the firm's Overland Park, Kansas office. He is chair of the firm's Employee Benefits Practice Group and helps his clients maximize the value and minimize the risks inherent in their benefit plans.