New Guidance Allows DC Plans to Include Deferred Annuities
as Part of Target Date Strategies
WASHINGTON, D.C. – The Insured Retirement Institute (IRI) issued a statement from IRI President and CEO Cathy Weatherford after the Treasury Department issued new IRS guidance to support the expanded use of annuities in defined contribution plans. The guidance makes clear that plan sponsors may offer deferred income annuities in target date investment options that are designated as the default investment in 401(k) and other defined contribution plans.
“This guidance demonstrates the Treasury Department’s commitment to, and ongoing support for, making lifetime income more accessible in workplace retirement plans. The announcement, which follows on the heels of the Treasury’s qualifying longevity annuity contract rule, is the latest move to help ensure that American workers and their families can attain guaranteed retirement income that cannot be outlived. By continuing to break down access barriers and providing plan sponsors with this clear guidance, the Treasury Department is acknowledging the important part annuities have in helping Americans attain financial security in retirement.
On behalf of our membership and all those who seek to enhance retirement security in America, we commend Deputy Assistant Secretary Mark Iwry, the Treasury Department and the Administration for their efforts to promote access to lifetime income, and we look forward to their continued partnership as we seek to ensure that all Americans can achieve a financially secure and dignified retirement.”
IRI has provided significant input to the Treasury Department and the Administration since it announced its broad initiative to promote access to lifetime income in retirement plans. As part of this effort, the Treasury Department announced a final rule for qualifying longevity annuity contracts (QLAC) in July at the IRI Government, Legal and Regulatory Conference. The QLAC rule facilitates access to deferred annuity options in qualified retirement plans including individual retirement accounts by allowing the value of longevity annuity contract to be excluded from calculations for required minimum distributions, which have impeded the use of these contracts in retirement plans in the past.
Click here to view the new guidance.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.