Monday, March 22, 2010

Employee Plans News – Spring 2010 Edition

The IRS released Employee Plans News – Spring 2010 Edition. It contains the following articles:

  • DOs and DON'Ts for Form 5307 Applications
  • What Can and Can't Be Rolled Over to a Roth IRA
  • The Taxable Portion of Your Rollover to a Roth IRA
  • Distribute Excess Deferrals
  • We're Glad You Asked!
  • Fix-It Guides - Common Problems, Real Solutions!
  • Future Requirements for Tax Return Preparers
  • Web Spins
  • Free Phone Forum - Retirement Plans Determination Letter Program,
    March 31, 2010
  • Critical Priorities…With Monika Templeman - Today's Discussion: Multiemployer Funding Issues
  • Employee Plans Published Guidance
  • PBGC Insights
  • DOL Corner
  • Calendar of EP Benefits Conferences

Monday, March 15, 2010

Treasury Regulation [REG–148681-09] – Notice of Proposed Rulemaking Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans

Internal Revenue Service
26 CFR Part 1
RIN 1545-BJ04

Employee Benefits Security Administration
29 CFR Parts 2509, 2520 and 2550
RIN 1210-AB33

Treasury Regulation [REG–148681-09] – Notice of Proposed Rulemaking Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans

The Department of Labor and the Department of the Treasury (the “Agencies”) are currently reviewing the rules under the Employer Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this notice is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue...Comments must be submitted on or before May 3, 2010.

Here is the DOL news release seeking public comments on lifetime income options:

Washington – The U.S. Departments of Labor and the Treasury today announced the publication of a request for information (RFI) soliciting public comments to assist the agencies in determining what steps to take to enhance retirement security for workers in employer-sponsored retirement plans through lifetime annuities or other arrangements that provide a stream of income after retiring. The RFI appears in today’s edition of the Federal Register.

“Today’s initiative is particularly important given the shift from defined benefit plans that offer employees lifetime annuities to 401(k) and other defined contribution plans that typically distribute retirement savings in a lump sum payment,” said Phyllis C. Borzi, assistant secretary for the Labor Department’s Employee Benefits Security Administration.

The RFI seeks comments on a broad range of topics, including:

  • The advantages and disadvantages of distributing benefits as a lifetime stream of income both for workers and employers, and why lump sum distributions are chosen more often than a lifetime income option.
  • The type of information participants need to make informed decisions in selecting the form of retirement income.
  • Disclosure of participants’ retirement income in the form of account balances as well as in the form of lifetime streams of payment.
  • Developments in the marketplace that relate to annuities and other lifetime income options.

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