There were significant changes in the retirement planning domain, where new planning opportunities were introduced to the market. One of the top retirement trends introduced is the qualified longevity annuity (QLAC). Carriers began offering these products last year once the rules and regulations were finalized.
QLAC is an attribute of an annuity contract that is purchased within a retirement plan (though Roth accounts are excluded) and under which payments are delayed until the purchaser reaches old age. Importantly, the value of the QLAC is excluded from the retirement account’s value when calculating the client’s required minimum distributions (RMDs) once the client reaches age 70 ½.
The annuity industry expects QLACs to be a hot topic for 2015. On behalf of IRI (Insurance Retirement Institute), the Maintenance Requests designed to support the modeling for QLAC have been voted and approved by our Life & Annuity members.
ACORD is in a position to fully support these contracts in the 2.34 release cycle, which is scheduled for final publication on June 26, 2015.