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According to Pensions & Investments, the House Ways and Means Committee this week will consider legislation that would “require plans to offer participants with more than $200,000 in their accounts an option to take a distribution of at least 50% of their vested account balance in the form of a protected lifetime income solution.” House Committee to consider requiring employer-sponsored retirement plans | Pensions & Investments (pionline.com) What do BenefitsLink mavens think about this?

The federal Thrift Savings Plan allows retirees to direct the TSP to purchase an annuity from an insurance company (either the entire or partial balance of the participant) when participant retires. IRS pub 721 says the participant is not taxed until the annuity payments are paid to the participant. What IRS section allows the transfer of the purchased annuity from the TSP to the insurance company to be considered a nontaxable event? Is the annuity considered part of the TSP plan even though the insurance company is now in charge of the payments and issues the tax documents each year? Most plans require direct transfers or rollovers to remain tax free.

Current plan document allows for in-service distribution for participants who are over 59.5 and employed for 5 years. The withdrawal is restricted to once a year. The client wants to amend the plan to allow multiple (periodic) payments of in-service distribution for participants who are over 70.5 and leave the restriction for once a year for participant who is 59.5. is this allowed?

Cash Balance Plan with in-service distributions at NRA allowed. Owner is going to start taking an annuity form, then convert to a lump sum when the plan terminates. While they are taking this annuity, are they able to take the full yearly amount once per year to satisfy? Or do they have to take monthly payments?

If a plan allows life annuity distributions, but requires the payment of a single lump sum to an insurance company to purchase a single premium annuity, do the QJSA rules apply?

Hello! I've read through a lot of old content on this board and just want to say thank you. It has been a huge help. Lord knows this industry in a minefield of misinformation and salesmen. I am the new administrator of a 20 year old group deferred annuity plan with MetLife for a mid-sized non profit. We are looking to terminate this plan and start a new 401k (or 403b) with much lower fees. We have calculated that each participant is paying an average of 2% in AUM fees annually (1.25% annuity fee + .75% ave fund fees). This plan also comes with a 7% surrender fee that decreases by 1% each year. We have been advised by a TPA to leave the plan open and start a new 403b with a different provider. However the provider that I'd like to work with (Guideline Technologies) does not yet offer a 403b. This would also drag out the closure of the MetLife account. Unless people are really pushed out of the plan, I imagine a lot of people will drag their feet. I'd like to avoid having to manage 2 separate providers for any longer than necessary. So I'm thinking it would be better to immediately terminate the 403b and incur all surrender fees (which I've calculated to come out to around 65k). I've run a cost analysis (attached) that shows that if we move to a low cost provider such as Guideline which has only .15% AUM fees, then our participants would be better off moving their assets immediately and incurring all surrender fees rather than wait a few years for the surrender fees to subside. So my question is... do you see any downside to this plan? Since the surrender fees would be paid by the individuals, could the organization be held liable for any damages? Or do you have a better solution for us? Thanks so much in advance. I'd be happy to answer any questions for clarification as well. Asset Loss v Surrender Fee Cost Analysis.xlsx

DB plan allows for bifurcated distributions, i.e., a partial lump sum with the remainder as an annuity. How do you calculate the RMD for such a distribution? Participant has reached required beginning date and wants to roll over as much of the lump sum as possible--but any portion that is attributable to the RMD isn't eligible for rollover. The RMD regs tell you how to calculate the RMD for an annuity or a total lump sum, but not a bifurcated distribution. Cheers.

Working on a conversion with a plan sponsor who merged their MP plan into their 401k Profit Sharing plan 14 years ago. The receiving vendor doesn't support annuities, so they can only accept the 401k assets. We explored a partial plan transfer of the k-assets only, but the other vendor won't liquidate by source. Can the plan sponsor and/or participants remove the J&S from the MP assets therefore removing the protected benefit?

I reach age 70 1/2 this year. I have four Individual Retirement Accounts, two of which contain Individual Retirement Annuities and nothing else. The annuities have not been annuitized. I don’t plan to annuitize them for a couple of decades. Can I add up the Required Minimum Distribution (RMD) from these and take the total from one of the Individual Retirement Accounts not containing an annuity and by doing so satisfy my RMD for all of the accounts and annuities? Does the fact that the annuities are in Individual Retirement Accounts make a difference?