There are many regulatory issues which make 2016 stand out as a ripe year for offering a lump-sum window. This article offers a brief review of the rationale for de-risking and the major struggles that defined benefit (DB) plan sponsors typically use and describes how lump-sum windows work. This article also provides a big picture view of how various issues might affect DB plan sponsors’ thinking about their fiduciary responsibilities.
This article was first published in the Winter 2015 issue of Benefits Law Journal.
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De-risking your pension plan: Do new regulations make 2016 the best time to offer lump-sum distributions?
Next year provides a unique confluence of regulatory and market conditions that may, in fact, prove to be the last time the lump-sum tactic is practical.