New Lump Sum Payments Rules Effective Immediately

The ERISA Industry Committee asks Department of Treasury and IRS
for clarification on rules

For Immediate Release

Washington, DC – The ERISA Industry Committee (ERIC) submitted a comment letter to the U.S. Department of Treasury and the Internal Revenue Service (IRS) asking for clarification on the elimination of lump sum windows in pension plans for individuals currently receiving lifetime income payments. Some pension plans allowed, in certain circumstances, retirees to replace their lifetime income payments with a single lump sum payout of their retirement account, known as lump-sum windows. The Agencies recently released guidance that prohibits this practice effectively immediately.

As the only national association advocating solely for the employee benefit and compensation interests of America’s largest employers, ERIC is seeking clarification that the new policy only applies in certain situations, specifically for retiree lump-sum window offerings that are considered to be an increase in annuity benefits to pay increased benefits. ERIC is requesting that the Agencies make clear that the guidance would still allow pension plans to make lump sum payments  in other contexts, such as in connection with a plan termination; at the time that the participant retires; upon the participant’s death; and after restrictions on a plan’s ability to offer lump-sum distributions cease to apply. ERIC is also concerned that future final regulations contemplated in the guidance will be made effective as of the date of the recent guidance. This would effectively result in a retroactive effective date for the future regulation.

“It is extremely important that ERIC members receive clarification on the new policy for use of lump sum payments as quickly as possible because the guidance is effective immediately,” said Annette Guarisco Fildes, president and CEO, ERIC. “We hope the IRS and Department of Treasury will work with us to minimize any disruptions for our members, their employees, and their benefit plans.”


All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918,

About the ERISA Industry Committee
ERIC is the only national association that advocates exclusively for large employer plan sponsors on health, retirement, compensation, and paid leave public policies at the federal, state, and local levels. With member companies that are leaders in every sector of the economy, ERIC promotes uniformity and flexibility for nationwide benefit plans.