A provision in Senate legislation that had investment advisors up in arms because it would reduce the value of inherited IRAs has been removed.
Industry officials said an amendment introduced to S. 1813, the Highway Investment, Job Creation and Economic Growth Act, by Sen. Harry Reid, D-Nev., Senate majority leader, last Thursday, effectively killed the provision without the need for floor action.
Sweetnam accurately predicted to National Underwriter last week that the provision would be removed and replaced by an interest smoothing provision related to defined benefit plans.
Under the Reid amendment, defined benefit plan liabilities would continue to be determined based on corporate bond segment rates, which are based on the average interest rates over the preceding two years.
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