Rumored changes to lump-sum payouts

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Q: There are several of us around the office who are close to retirement (i.e., the next three or four years), and we’ve heard rumors that lump-sum settlements will change starting in 2013 and that the calculation will result in reduced lump-sum payment amounts. Are there any changes coming in 2012 and beyond that will affect our lump-sum payments? When I go to my Fidelity website and look at my projected lump-sum payments in 2012, 2013 and 2014, I don’t see any reductions. I’m wondering whether it has something to do with taxes changing on the lump-sum amounts starting in 2013.

A: Rest easy. The rumors you heard have no basis in fact.

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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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