Well, the IRS changed the rules and AIG responded. In fact, it appears to have been first out of the gate.
New regulations from the IRS governing qualified longevity annuity contracts, issued July 2, opened the door to deferred income annuities in 401(k) and other retirement products.
AIG’s American General Life Insurance Co. has now jumped in with its American Pathway Deferred Income Annuity, which it noted in a product bulletin “is now eligible to be designated as a QLAC when purchased as a traditional IRA.”
While the new rules allow QLACs to be offered in DC plans, the first to come out were expected be those for IRAs.
QLACs are deferred income annuities that don’t begin to make payments until considerably later in life than the standard annuities — say, age 80 or even 85.
The problem, before the IRS issued its rule change, was that although people might have acquired DIAs, and even if they’d used retirement account money to pay for them, they would still have to begin taking payments at age 70½, in accordance with required income distribution regulations.