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Brokers can help them place the annuity, but everything has a cost. Nothing prohibiting the sponsor going directly to the insurance company and skipping the middle man. There are only two or three that will quote at that size.

You can do a window - discrimination is looked at separately with respect to current employees and former employees, so no problem offering only to current employees. You can offer lump sum to retirees in pay status provide it is non-discriminatory with respect to that group, and so limiting to (former) NHCEs even if top-25 restrictions are not in play would be OK as well. I would suggest not adding a general lump sum option and, outside of any window, only allow lump sums upon termination. But LSWs in advance of a plan termination is not w/o its drawbacks. The counts you give are small - is that just for example purposes or is this a relatively small plan? Because if you offer a lump sum window, and also offer to retirees, and are left with a small in pay status group for which to purchase annuities, you could have a very difficult task in finding an insurer to underwrite and likely incur a sizeable negative selection premium as well. If you have a reasonable retiree liability, that is what attracts the insurer and helps ensure they'll write the deferreds as well. Insurers love immediate annuities, do not like deferred annuities (from plans), and hate plans with general lump sum options. Anything the sponsor can do to maintain the former while avoiding the latter as much as possible will improve their plan termination annuity purchase experience (willing providers and pricing). A good broker (we use Brentwood) can advise you all on that and (this is the mistake often made by not doing) should be consulted now rather than waiting until the formal termination process begins. If your plan is small, if it looks like you may be able to entice everyone, actives/deferreds/retirees, to take a lump sum, that would be your best outcome but it's a risky proposition if you're left with just a couple of annuities and a killer if any are deferred.

For what it's worth, shortly after this version of EPCRS was issued, I had conversations with several senior IRS folks at a conference on this issue. Their opinion, which I assume still holds, is that this language requires an increase in benefits for every participant in the plan, not just those affected by the correction. I was dealing with a situation in which a plan allowed loans on terms more generous than permitted by the loan policy. I proposed a retroactive amendment to the loan policy to confirm the more generous terms that were being applied in practice. I was told this would not work because it did not increase the benefits for every participant in the plan, only those people who took loans and, of those, only people with loans whose terms were more generous than allowed by the existing policy. (All were non-HCEs, so it would not have been discriminatory.)