Employment Law Resources


Oct 10 2013

IRS Guidance Allows Defined Benefit Pension Annuity Purchases with Rollovers from Plan Sponsor’s Defined Contribution Plan

On February 13, 2012, the IRS issued Revenue Ruling 2012-4, which permits qualified defined benefit plans to accept direct rollovers from defined contribution plans maintained by the same plan sponsor thereby allowing plan participants to purchase annuities that are incremental to the amount the defined benefit plan would ordinarily provide.  The Revenue Ruling applies for rollovers beginning on or after January 1, 2012, provided the defined benefit plan is amended to permit such rollovers and to incorporate certain actuarial assumptions.   In addition, the defined benefit plan annuity, increased by the defined contribution rollover conversion, must commence within 180 days after the date of the rollover election.