Business of Benefits

Business of Benefits

Tag Archives: QLAC

DOL Provides Key ERISA Guidance on QLAC/DC Lifetime Income

Posted in Fiduciary Issues, Lifetime Income
The DOL just published its first serious guidance on supporting lifetime income with the publication of FAB 2015-2, guidance which is very necessary for the success of the Qualified Longevity Annuity Contracts, as well as DC lifetime income income. The FAB is an initial, but substantial, step in addressing one of the most pressing of the ERISA issues related to providing lifetime income from defined contribution plans.… Continue Reading

The 403(b) QLAC

Posted in Lifetime Income, Uncategorized
The QLAC seems to be in the 403(b) “sweet spot”, considering that 403(b) annuities were originally designed to provide lifetime income in the first place. However, as with all things 403(b), however, there are a few unusual twists when trying to put a QLAC in a 403(b) arrangement. Here are a few of the things to consider… Continue Reading

DOL’s Proposed Fiduciary Rules May Unexpectedly Open Lifetime Income Door, If…….

Posted in DOL Proposed Fiduciary Regs, Fiduciary Issues, Lifetime Income
With regard to the DOL's fiduciary proposed regulations, There is much to like in the new rules; some troubling things; and, perhaps, a mistake or two which will be all flushed out in the coming months. There are a couple of technical points which are worthwhile sharing because they represent what we can expect of the "unexpected" as we work through the changes' impact. These include the impact on lifetime income , and the application of the PT rules on the purchase of annuities-including QLACs.… Continue Reading

A Regulatory and Fiduciary Framework for Providing Lifetime Income from Defined Contribution Plans

Posted in Lifetime Income, Lifetime Income Published Papers
A more complete and up to date description of how lifetime income can work in a DC plan is in order. Evan Giller (newly Of Counsel with Boutwell and Faye) and I put together the attached piece entitled "Regulatory and Fiduciary Framework for Providing Lifetime Income from Defined Contribution Plans." It is originally appearing in the New York University Review of Employee Benefits and Executive Compensation - 2013. Published by LexisNexis Matthew Bender. Copyright 2013 New York University." In the paper, we've drawn upon our long experience with retirement plan annuities, mixing it well with all of these new developments.… Continue Reading

Suggestions for Regulatory Next Steps to Accommodate DC Annuities

Posted in Lifetime Income
Both of these agencies (Treasury and DOL) continue to attempt to support this process, using their existing regulatory authority. Though there are a number of things which probably need legislative action in order to really make guaranteed lifetime income readily available, there are still a few things regulators may want to consider doing to help it all along… Continue Reading

BNA’s “First Steps to Modernizing DC Annuitization: QLACs and Revenue Ruling 2012-3″

Posted in Lifetime Income, Lifetime Income Published Papers
For those of you who do not subscribe to BNA, BNA published as an "Insight" an article I wrote on QLAC and Rev Rul 2012-3 (yes, my author agreement permits me to post it here, with attribution).  Look for Paul Hamburger’s upcoming related article, delving into a number of technical and policy issues they raise,… Continue Reading

QLAC and the Fiduciary Standard in the Commercial Pooling of Interest

Posted in Lifetime Income
The Treasury’s issuance of proposed regulations introducing the "Qualified Longevity Annuity Contract" is a substantial step in the efforts to better provide plan participants the ability to use their defined contribution balances to plan for retirement security. One of the QLAC’s most useful effects is that it gives us a "base," a laboratory of sorts,… Continue Reading

How DC Annuitization Works; Using the QLAC

Posted in Lifetime Income
I have spent much of my career studying and practicing in the law of annuities as it applies to retirement plans-starting even prior to my long stint with an insurance holding company, when the Master Trust of the Fortune 100 company for which I was in-house ERISA counsel formulated its own synthetic, pooled GIC for… Continue Reading

Treasury and IRS Successfully Lay the Base For Lifetime Income: The “2012-3 Annuity” and The QLAC

Posted in Lifetime Income
Treasury nailed it (or, as our eldest son is fond of saying, they just "friggin’" nailed it). With just a relatively short regulation and a Revenue Ruling, Treasury simply and in a very straightforward way laid out the definitive structure for defined contribution plans (like 401(k) plans) to start providing lifetime income in a market… Continue Reading
.