"It is not surprising that IRS is trying to hold the line on retiree cashouts in response to concerns that have been raised in defense of retirees who may not fully understand the long-term ramifications of taking a lump sum. Comments on the merits of a change to the proposed regulation will likely challenge the notion that accelerating payments rather than continuing deferral could in any way circumvent the requirements of the minimum distribution rule. The end result is difficult to predict. However, given that most employers who have offered these windows have limited eligibility to participants whose benefits are not yet in pay status in light of concerns over anti-selection, the impact of changing the regulation should be minimal."

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