Effective May 1, the Principal Deferred Income Annuity is available as a qualifying longevity annuity contract (QLAC) in the state of New York.
With approval in New York, Principal’s QLAC solution is now available in all states.
Enhanced to meet the recent Treasury Department regulation, QLAC offers your clients the opportunity to extend their retirement savings. By purchasing the Principal Deferred Income Annuity as a QLAC, clients with eligible IRA assets can defer the distribution of a portion of their qualified assets beyond age 70½, reducing their RMDs until a later date – up to age 85. Few other qualified investments offer this opportunity.
Premiums per individual are limited to the lesser of $125,000 or 25% of all qualified assets. The dollar limit applies across all plans and IRAs collectively, while the percentage limit applies to IRAs on an aggregate basis. For Principal Deferred Income Annuity contracts issued as a QLAC, purchase eligibility is based on the owners’ total IRA balances.
Applications will be updated to include a QLAC tax status option on May 1, 2015. There will be a grace period with the existing deferred income annuity applications for non-QLAC deferred income annuity purchases. However, beginning June 1, 2015, any old versions of the deferred income annuity application received will be considered not in good order (NIGO).
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