IRS Updates Minimum Present Value Requirements for Defined Benefit Plan Distributions

Internal Revenue Service (IRS) and Treasury Department have released final regulations providing guidance on minimum present value requirements applicable to certain defined benefit pension plans. These regulations reflect changes made by the Pension Protection Act of 2006 to the prescribed interest rate and mortality table and other guidance, including rules regarding the treatment of preretirement mortality discounts and Social Security level income options. Specifically, these regulations update Internal Revenue Code §1.417(e)-1.

The final regulations are applicable on or after October 1, 2024.

The final regulations are effective January 19, 2024.