Focus On… Lump Sum Distributions from Defined Benefit Plans

Source: David A. Pratt, Journal of Pension Benefits, Vol. 26, No. 1, Autumn 2018
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As one strategy to reduce risk, some defined benefit plans are allowing lump sum distributions. This practice gives rise to numerous questions, among them whether the lump sum received by the participant is equal to the accrued value he or she is giving up.