New Longevity Insurance Product for Defined Contribution Plans

MetLife announced today the launch of the MetLife Retirement Income Insurance® qualifying longevity annuity contract (QLAC)1. This deferred income annuity is designed specifically for the institutional market and is available for qualified defined contribution (DC) retirement plans.

“Like all deferred income annuities, our new Retirement Income Insurance QLAC is designed to provide income for the latter part of retirement and creates a guaranteed income stream when other retirement income sources are most likely to run short,” says Roberta Rafaloff, vice president, Institutional Income Annuities, in Corporate Benefit Funding, MetLife’s institutional retirement group. “As the leading provider of institutional income annuities and first company to introduce longevity insurance into the marketplace in 2004, MetLife has been focused on solutions to address longevity risk for a long time. By incorporating this new option as part of their plan, sponsors can help participants ensure more successful retirement outcomes.”

Plan participants can benefit from allocating a portion of their DC plan balance to the MetLife Retirement Income Insurance® QLAC. The portion of the DC plan balance used to purchase the QLAC is excluded from the funds used to determine the required minimum distribution (RMD) participants are required to take beginning after age 70 ½, so participants can defer their income payments to a later age, with the first income payment beginning at average life expectancy, at or before age 85. The maximum amount that can be used for a QLAC is the lesser of 25% of the participant’s account balance or $125K.

“Historically, deferred income annuities have not been a viable option for DC plan participants, since they could not defer their income start date beyond age 70 ½ without incurring a significant tax penalty due to U.S. Treasury regulations2,” notes Rafaloff. “In July 2014, the U.S. Treasury issued final regulations on QLACs that changed this. By excluding the amount used to guarantee income at a later age, DC plan participants can, for example, have both immediate income through systematic withdrawals for a portion of their balance, and guaranteed income for the rest of their lives once the QLAC begins payment.”

“The final regulations have a significant impact on participants and help them mitigate the greatest risk they face in retirement: outliving their assets,” adds Rafaloff. “By lowering the required annual distribution participants are required to take early in retirement, more money can remain in the participant’s DC plan with the potential to grow. And, in addition to that, by deferring payments to a later age, the participant can maximize the income amount that is possible when the QLAC’s guaranteed income payments begin.”

Payment options for the MetLife Retirement Income Insurance® QLAC include both Lifelong Income for One, which guarantees the participant will receive fixed payments for as long as he or she lives, and Lifelong Income for Two, which guarantees that the participant and his or her spouse will receive fixed payments for as long as at least one of them lives. The MetLife Retirement Income Insurance QLAC also offers an optional inflation protection feature, which increases a participant’s income payments each year. In an effort to protect a participant’s payments from an increased cost of living, he or she can choose to have them increase by 1%, 2% or 3% each year.

About MetLife 
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit

1The MetLife Retirement Income Insurance® QLAC has been approved by New York State. It may not be available in all states.

2Any discussion of taxes is for general informational purposes only and does not purport to be complete or cover every situation. MetLife, its agents and representatives may not give legal, tax or accounting advice and this document should not be construed as such. You should confer with your qualified legal, tax and accounting advisors as appropriate.


Judi Mahaney