Shut the door – IRS ends defined benefit plan lump sum payouts

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Abstract: Last summer, the IRS effectively overturned a number of private letter rulings issued over the past several years. Those rulings allowed plans to amend their qualified defined benefit plan to permit a participant in pay status to elect to convert the remaining value of the participant’s annuity payments to a lump sum payment during a temporary “window period.” This short article discusses the IRS’s new stance on issuing determination letters in these situations.