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By 
May 05, 2021 at 11:02 AM
What You Need to Know
- Section 201 could help insurers add benefits to annuities held inside IRAs.
- Section 202 might make annuities that protect holders against extreme longevity more attractive.
- Section 203 would clear an obstacle to modernizing variable annuity fund menus.
The House Ways and Means Committee is discussing and revising a retirement bill that includes three major annuity provisions.
The committee will mark up H.R. 2954, the “Securing a Strong Retirement Act of 2021″ bill, or Secure Act 2.0, at a meeting that starts at 11 a.m. today. Live video of the markup, and a video recording, will be available here.
H.R. 2954 is a new version of a bill that was introduced in October 2020.
Ways and Means Chairman Richard Neal, D. Mass., and Rep. Kevin Brady, R-Texas, introduced introduced H.R. 2954 Monday.
The main annuity sections in H.R. 2954 are in “Title II — Preservation of Income.”
Section 201 would change an actuarial test included in the minimum distribution regulations.
The existing rules are supposed to keep taxpayers from reducing their current tax bills too much, by deferring too much income.
Today, bill drafters say, the rules limit the ability of insurers to add popular features, such as return of premium death benefits, to income annuities held inside 401(k) plans, IRAs and other retirement savings arrangements.
Section 202 would change the rules governing qualifying longevity annuity contracts, or QLACs. A QLAC is a kind of deferred income annuity that’s designed to start paying benefits toward the end of an individual’s life expectancy, to protect a long-lived retiree against running out of income for a very low price.
