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Bill Will Streamline Partial Annuitizations

Tucked away in the Small Business Jobs and Credit Act of 2010 (H.R. 5297) is a provision easing partial access to annuities, an idea that...
September 27, 2010

Tucked away in the Small Business Jobs and Credit Act of 2010 (H.R. 5297) is a provision easing partial access to annuities, an idea that has been around since first proposed by Rep. Earl Pomeroy (D-N.D). The provision would allow owners of nonqualified annuities, which are retail annuities outside retirement plans, to more simply annuitize a segment of their annuity contract, letting the remaining portion grow on a tax-deferred basis.

"It's going to make it a whole lot easier for people to annuitize a portion of their nonqualified annuity contract," said Alane Dent, vice president for federal relations, tax and retirement security at the American Council of Life Insurers. "Any way that we can encourage people to receive lifetime income is a good thing. Hopefully we will see more people encouraged to take some of their deferred annuity as a partial annuitization."

In addition to helping holders of annuities, Congress' Joint Committee on Taxation says the annuities provision would also generate federal revenue of $956 million over 10 years, from 2011 to 2020. President Barack Obama signed the bill into law on September 27.

Click here to read Bill to Streamline Partial Annuitizations (BestWire 9/24/10)