IRS Finalizes Rule to Update Minimum Present Value Requirements for DB Plan Distributions

The IRS has issued a final rule to update minimum present value requirements for defined benefit plan distributions. According to a summary of the rule, this guidance reflects changes made by the Pension Protection Act of 2006 to the prescribed interest rate and mortality table and addresses other matters, including rules regarding the treatment of preretirement mortality discounts and Social Security level income options. A proposed rule was issued in 2016. This guidance applies to distributions with annuity starting dates that occur on or after October 1, 2024.