by Stephen Pavlick, Daniel Senecoff and Alan Nesburg

Under some defined benefit plans, participants receive a portion of the benefit as an annuity and a portion as a lump sum.  Sponsors of such plans should review the method used for calculating these benefits, particularly annuity benefits, to determine whether the combined value of both portions meets the minimum present value requirements for lump sums.  Recent proposed IRS regulations include an interpretation of current law that may differ from the way some plans have been administered.

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