DCIIA Announces FAQ Resource for New Qualifying Longevity Annuity Contracts (QLAC) Regulations

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In its newly released document, “Qualifying Longevity Annuity Contracts: Answers to Frequently Asked Questions (FAQs),” DCIIA provides insight into recently announced regulations that make longevity annuities accessible to the defined contribution (DC) and individual retirement account (IRA) markets.

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Defined contribution stakeholders applaud Treasury’s focus on this topic and anticipate that the new regulations will help clarify uncertainties regarding regulatory support of lifetime income options for US retirement plans.

Prior to the issuance of regulations announced by the U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) in July 2014, longevity annuities were, as a practical matter, not accessible to DC and IRA investors due to Internal Revenue Code rules that require distributions from a DC or IRA account to begin by age 70 ½, which is prior to the age longevity annuities are designed to begin income payments. With these new regulations, qualifying longevity annuity contracts (QLACs) are exempt from required minimum distribution (RMD) rules within prescribed parameters. DCIIA’s Frequently Asked Questions (FAQs) resource seeks to provide clarification on common questions that plan sponsors and their advisors may have regarding these new regulations.

DCIIA Executive Director, Lew Minsky, commented, “Defined contribution stakeholders applaud Treasury’s focus on this topic and anticipate that the new regulations will help clarify uncertainties regarding regulatory support of lifetime income options for US retirement plans. DCIIA expects that the pace of product innovation and resource development within the retirement income space will increase, helping individuals better manage the spending and distribution phases of their retirement.”

ABOUT DCIIA
The Defined Contribution Institutional Investment Association (DCIIA) is a nonprofit association dedicated to enhancing the retirement security of American workers. Toward this end, DCIIA fosters a dialogue among the leaders of the defined contribution community who are passionate about improving defined contribution outcomes. DCIIA members include investment managers, consultants, law firms, record keepers, insurance companies, plan sponsors and others committed to the best interests of plan participants. For more information, visit: http://www.dciia.org.

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