IRS Change Could Hurt Group Annuity Sales, Expand Rollover Market
March 12, 2019 by Allison Bell
A new Internal Revenue Service decision could boost employers and retirement planners but hurt life insurers and the Pension Benefit Guaranty Corp. (PBGC).
The IRS has announced the decision in IRS Notice 2019-18.
The notice will help a pension plan sponsor use the offer of a one-time cash payment to buy out a participant’s pension income stream.
A New Source of Rollover Business?
Today, most U.S. defined benefit pension plan sponsors pay pension insurance premiums to the PBGC. A sponsor’s PBGC premium bill depends on the number of participants in the sponsor’s plan, and the amount of benefits each participant has been promised.
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