The IRS issued regulations, effective Wednesday, permitting defined contribution plans to eliminate some forms of payment as long as a lump-sum option is still available.
The final regulations eliminate or restrict disbursement of accrued benefits for a particular form of payment as long as a single sum distribution is included as an alternative.
Certain forms of disbursement such as annuities and installments were rarely used and were a burden for plan sponsors to keep, explained a Treasury official. But plan sponsors have not been allowed to eliminate any disbursement forms once they were offered in the plan.
