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Treasury Department Proposes Guidance Package on Lifetime Income; Seeking Comments and Schedules Public Hearing for June 1
The U.S. Department of the Treasury released a proposed guidance package on lifetime income retirement plan options and a related fact sheet. The proposal will reduce regulatory burdens and make it easier for retirees to choose to receive their benefits as a stream of income in regular payments for as long as they live. These flexible “lifetime income” options can provide greater certainty in retirement and minimize the risk of retirees outliving or underutilizing their retirement savings. The Council of Economic Advisers also issued a related report, "Supporting Retirement for American Families."
As part of the lifetime income initiative, the Treasury Department released proposed rules relating to the purchase of longevity annuity contracts under tax-qualified defined contribution plans. The regulations will provide guidance necessary to comply with minimum distribution rules. The document includes a notice of public hearing on the proposed regulations.
The Treasury Department also released proposed rules providing guidance relating to the minimum present value requirements applicable to defined benefit pension plans. The regulations would change current minimum value requirements for defined benefit plan distributions to permit plans to simplify the treatment of optional forms of benefit paid partly in the form of an annuity and partly in a more accelerated form. This document also includes a notice of public hearing.
Public hearings on the above proposed rules will be held June 1, 2012. Written or electronic comments must be received by May 3, 2012. Outline of topics must be received by May 11, 2012.
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