Final regulations provide anti-cutback exception for single-employer defined benefit plan of plan sponsor in bankruptcy 

November 7: The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9601) that adopt a limited exception to the anti-cutback rules to allow a plan sponsor that is a debtor in a bankruptcy proceeding to amend its single-employer defined benefit plan to eliminate a single-sum distribution option (or other option allowing for accelerated payments) if certain conditions are satisfied.

The anti-cutback rules generally prohibit plan amendments from eliminating or reducing accrued benefits, early retirement benefits, retirement-type subsidies, and optional forms of benefit under qualified retirement plans. In June 2012, regulations were proposed to provide a needed exception to these rules for a single-employer defined benefit plan of a plan sponsor in bankruptcy.


Today’s final regulations adopt the rules set forth in the June 2012 proposed regulations “with minor modifications.”


Read the final regulations: T.D. 9601 [PDF 82 KB]


The final regulations have an effective date of November 8, 2012 (which is the date when they will be published in the Federal Register.)



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©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.