IRS Issues Regulations on Longevity Annuity Contracts

The IRS released final regulations relating to the use of ?Ç£qualifying longevity annuity contracts?Ç¥ (?Ç£QLAC?Ç¥).?á A QLAC is a special type of annuity contract under a tax-qualified defined contribution plan, such as a 401(k) plan, which provides a lifetime income stream starting no later than age 85.?á Amounts held in a QLAC are exempt from the required minimum distribution rules of the Internal Revenue Code.?á Pursuant to the final regulations, only up to the lesser of $125,000 or 25% of the participant?ÇÖs account balance may be invested in a QLAC.?á Additionally, a QLAC can have no cash surrender value. The final regulations can be found?áhere.