Pension Insurer Finalizes Rule on When It Will Pay Out Lump Sums

The federal government’s private-sector pension insurer is clarifying the rare conditions for when it will distribute single-employer plan benefits as a lump sum, finalizing a regulation the agency first proposed in 2019.

The final rule (RIN 1212-AB27) issued Monday states that the Pension Benefit Guaranty Corporation won’t distribute benefits as a lump sum unless they are valued at $5,000 or less, even if a participant elected a lump sum distribution before the plan was terminated. Lump sums are reserved for payments to an estate and for participants already in pay status when the plan terminates, the rule states. ...