Close
Close

IRS issues model amendments for certain defined benefit plans

RFP
To facilitate the payment of benefits from a defined benefit pension plan partly in the form of an annuity and partly as a single sum, Treasury and the IRS amended the regulations under Section 417(e) to make this approach simpler to apply. This was done to encourage plan sponsors that include single-sum distribution options to offer participants the option to secure financial protection against unexpected longevity by receiving a portion of their benefits in an annuity form, while at the same time increasing liquidity during retirement by receiving a single-sum distribution.

In Notice 2017-44, the IRS provides model amendments that plan sponsors may use to amend plans to offer the bifurcated benefit distribution options in accordance with the regulations.

Contact
Eddie Adkins
Partner, Washington National Tax Office
T +1 202 521 1565

Jeffrey Martin
Partner, Washington National Tax Office
T +1 202 521 1526

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.