Definition of Qualifying Longevity Annuity Contracts Clause Samples
The Definition of Qualifying Longevity Annuity Contracts clause establishes the specific criteria that an annuity contract must meet to be considered a qualifying longevity annuity under relevant laws or regulations. Typically, this includes requirements such as limits on premium payments, restrictions on when distributions can begin, and compliance with certain tax rules. By clearly outlining these standards, the clause ensures that only annuities meeting these qualifications receive favorable tax treatment or regulatory status, thereby providing clarity and reducing the risk of non-compliance for both providers and purchasers.
Definition of Qualifying Longevity Annuity Contracts. A Qualifying Longevity Annuity Contract (QLAC) is an annuity contract that is purchased from an insurance company for an Employee and that, in accordance with the rules of application of this Article II and Treas. Reg. §1.401(a)(9)-6, Q&A - 17, satisfies each of the following requirements:
(i) Premiums for the contract satisfy the requirements of subsection (2) of this subsection (d);
(ii) The contract provides that distributions under the contract must commence not later than a specified annuity starting date that is no later than the first day of the month next following the 85th anniversary of the Employee’s birth;
(iii) The contract provides that, after distributions under the contract commence, those distributions must satisfy the requirements of this Article and Treas. Reg. §1.401(a)(9) (other than the requirement that annuity payments commence on or before the Required Beginning Date);
(iv) The contract does not make available any commutation benefit, cash surrender right, or other similar feature;
(v) No benefits are provided under the contract after the death of the employee other than the benefits described in Subsection (3) of this subsection (d);
(vi) When the contract is issued, the contract (or a rider or endorsement with respect to that contract) states that the contract is intended to be a QLAC; and
(vii) The contract is not a variable contract under Code §817, an indexed contract, or a similar contract, except to the extent provided by the Commissioner of the Internal Revenue Service in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin. Pre-Approved Governmental Defined Contribution Plan Section 8 – Required Minimum Distributions