Plan sponsors can offer target-date funds that include deferred-income annuities to older, higher-income earners without breaching ERISA's non-discrimination requirements, the IRS said Friday in a special ruling.
The ruling is expected to boost the popularity of lifetime-income options, helping employees hedge against the potential of running out of money in retirement.
In issuing its special ruling, the IRS said, "a TDF that holds deferred annuities should not be expected to permit participants whose ages fall outside the designated age-band for the TDF to hold an interest in that TDF."
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