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IRS proposes new regulations/mortality tables for DB valuations

On April 28, 2022, the IRS published proposed regulations/mortality tables for determining the present value of benefits under defined benefit plans for purposes of determining the plan’s ERISA minimum funding requirements, Pension Benefit Guaranty Corporation variable-rate premiums, and lump-sum valuations.

SECURE 2.0 – the Securing a Strong Retirement Act

On October 27, 2020, House Ways and Means Committee Chairman Neal (D-MA) and Ranking Member Brady (R-TX) released the Securing a Strong Retirement Act – a set of retirement savings policy changes with bi-partisan support. The bill builds on changes made by 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act and may provide a template for further improvement of our current retirement savings system.

2019 year in review

In this article we review some of the significant retirement policy developments of 2019, including Congress’s consideration of broad bipartisan legislation (the SECURE Act), DOL’s electronic participant communications proposal, and the Supreme Court putting three ERISA retirement plan cases on its docket. Legislation Retirement policy-related legislative activity focused on passage of the Setting Every Community Up…Read More

IRS proposes updated life expectancy tables for required minimum distributions

On November 7, 2019, IRS proposed changes to the required minimum distribution (RMD) rules, updating the life expectancy tables to be used in calculating required distributions. The new tables significantly increase the applicable life expectancy assumptions and, consequently, reduce required distribution amounts. In this article we briefly review IRS’s proposal. Background Internal Revenue Code section…Read More

Society of Actuaries publishes MP-2019 mortality improvement scale and new mortality tables, showing decrements in life expectancy

In October 2019, the Society of Actuaries published (1) a new Mortality Improvement Scale MP-2019 and (2) new base Pri-2012 Mortality Tables. Both MP-2019 and Pri-2012 reflect decrements in age 65 life expectancy which, when adopted by sponsors and regulators, will generally reduce (marginally) defined benefit plan liability valuations. In this article we very briefly…Read More

Legislative Update – April 2019

Major bipartisan retirement policy legislation introduced in the Senate and the House In the last two weeks, major bipartisan retirement policy legislation has been introduced in both houses of Congress. In the Senate, Senators Grassley (R-IA) and Wyden (D-OR), the Chairman and Ranking Member (respectively) of the Senate Finance Committee introduced the Retirement Enhancement and Savings…Read More

Five things to think about before paying a retiree lump sum

IRS recently released Notice 2019-18, stating that it no longer intends to amend current required minimum distribution (RMD) regulations to prohibit the payment, as part of a “lump-sum window program,” of a lump-sum to a retiree currently receiving an annuity. The new Notice appears to authorize offering a lump-sum option to retirees in de-risking transactions…Read More

Regulatory update — November 2018

In this regulatory update, we briefly review ERISA Advisory Council recommendations for rule changes to encourage the inclusion of lifetime income options in QDIAs, the effect of the new Society of Actuaries MP-2018 mortality improvement scale on liability valuations, and a recent IRS “Program Letter” identifying qualified plan distributions as a compliance target. ERISA Advisory…Read More

Executive Order on Strengthening Retirement Security in America

On August 31, 2018, President Trump signed an Executive Order on Strengthening Retirement Security in America. Summarizing, the order does three things: Agencies to consider authorization of Open MEPs: It instructs the Secretary of Labor to “examine policies” that would eliminate ERISA regulatory obstacles to the creation of Open MEPs; and it instructs the Secretary…Read More