Law360, New York (July 22, 2015, 12:49 PM EDT) -- On July 9, the Internal Revenue Service released Notice 2015-49 to announce it intends to prohibit retirees who are receiving annuity payments from a defined benefit pension plan from electing a lump sum in lieu of the annuity. The IRS will prohibit these elections by amending the Treasury regulations governing required minimum distributions. The notice reverses the IRS's position in a series of private letter rulings that allowed plan sponsors to offer retirees who had already commenced lifetime annuity payments the opportunity to cash out their remaining benefits in one lump sum payment during a limited "window period." Plan sponsors can continue to offer a lump sum opportunity to terminated vested participants who are not yet in pay status, but the notice highlights the increased government scrutiny that lump sum window programs are attracting....
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