Whenever Congress contemplates pension legislation, those approaching retirement often worry about how any proposed legislation might impact a lump sum payout from a pension plan. This article from SFGate.com discusses that very issue and provides some helpful info: “Pension bill could cut lump-sum payouts.” Excerpt:
Using current interest rates and some guesswork, Norman Stein, a law professor at the University of Alabama, estimates that a person taking a lump sum at age 60 would get on the order of 9 percent less under the Boehner bill. A person taking a lump sum at 55 would get roughly 12 percent less.“The worst-case scenario is for people taking a lump sum at a younger age, ” says Ron Gebhardtsbauer, senior pension fellow with the American Academy of Actuaries. They would see “a fairly substantial drop in the lump sum.”
The proposal would not change the value of annuity payments.
See previous posts on the proposed pension legislation here.