Lifetime Income through Target Date Investments

Notice 2014-66 provides guidance on the provision of lifetime income in a defined contribution plan through investment in a series of target date investment options.

Document Excerpt

This notice provides a special rule that enables qualified defined contribution plans to provide lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants. This special rule provides that, if certain conditions are satisfied, a series of TDFs in a defined contribution plan is treated as a single right or feature for purposes of the nondiscrimination requirements of ยง 401(a)(4) of the Internal Revenue Code. This permits the TDFs to satisfy those nondiscrimination requirements as they apply to rights or features even if one or more of the TDFs considered on its own would not satisfy those requirements.

Link

http://www.irs.gov/pub/irs-drop/n-14-66.pdf

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