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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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.