By The Associated Press, Pensionrights.org
July 13, 2015
WASHINGTON – In a welcome move by the Department of the Treasury and the IRS, the agencies released last week a notice to amend Treasury regulations to stop companies from offering lump-sum buyouts to retirees who are already receiving a monthly pension. The Pension Rights Center has been critical of these transactions, which erase the federal private pension protections of ERISA, turn guaranteed lifetime retirement income into a one-time chunk of money that can easily be outlived, and often result in a significant loss of retirement wealth for elderly Americans.
“We are gratified that Treasury has moved to stop these lump-sum buyouts, which are truly among the most cynical and dangerous pension abuses we’ve seen,” said Norman Stein, senior policy advisor to the Pension Rights Center and a law professor at Drexel University. Earlier this year Stein authored a policy paper on lump-sum buyouts and annuity transfers (another form of so-called “de-risking” activities).