Guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.
1For qualified contracts, the maximum length of time for the Period Certain options may be less than 10 years, if necessary to comply with RMD regulations for annuities stipulated in the Setting Every Community Up for Retirement Enhancement (SECURE) Act.
2Not available with a QLAC.
3All Joint Life options require that the joint annuitant be a spouse.
4Not available on qualified contracts.
Broker/dealer and state variations may apply. Contact your broker/dealer for availability.
Qualified contracts, including traditional IRAs and Roth IRAs, are eligible for favorable tax treatment under the Internal Revenue Code (IRC). Certain payout options and certain product features may not comply with various requirements for qualified contracts, which include required minimum distributions and substantially equal periodic payments under IRC Section 72(t). Therefore, certain product features, including the ability to change the annuity payment start date and to exercise withdrawal features, may not be available or may have additional restrictions. The payment acceleration feature is available but may be considered a modification to the 72(t) program and may subject the series of 72(t) withdrawals, including any prior withdrawals, to an additional 10% federal tax. In addition, certain payout options may not be available for qualified contracts or QLAC.
Pacific Secure Income can be used as a qualified longevity annuity contract (QLAC), subject to state and firm availability. For the contract to be eligible as a QLAC, certain requirements under Treasury Regulations must be met, including limits on the total amount of purchase payments that can be made to the contract. Compliance with the QLAC purchase payments limit is the owner’s responsibility, and failure to adhere may result in the contract no longer being considered a QLAC, and would subject the value of the QLAC to required minimum distribution requirements that may not be accessible through the contract. In addition, there are restrictions on annuity payout options that can be elected under a QLAC contract, and the commutation, payment acceleration, and inflation protection features are not available. Changes to marital status may require a change to the annuity payments to maintain the QLAC status.
Income from annuity payments received from Pacific Secure Income cannot be aggregated or combined with income from other IRA contracts/assets for purposes of satisfying the required minimum distributions.
For Roth IRAs, upon the Roth IRA owner’s death, distributions to the designated beneficiaries may be subject to IRS required minimum distribution rules. If the designated beneficiary is not the spouse, the beneficiary may be required to take a lump sum payment of the present value of the guaranteed payments if a death benefit becomes available. For the purpose of qualified distributions from a Roth IRA, since the five-year waiting period is tracked by the Roth IRA holder, the designated beneficiary and/or spouse who elects to treat the Roth IRA as his or her own will also need to take on this responsibility going forward when claiming qualified distributions.
Nonqualified contracts may not be subject to the various requirements for qualified contracts, but are still subject to an additional 10% federal tax for annuity payments, withdrawals, and other distributions made prior to age 59½. While there are exceptions to this additional federal tax under IRC Section 72(q), certain payment options may not comply. The payment acceleration feature may be considered a modification to the 72(q) program and may subject the series of 72(q) withdrawals, including any prior withdrawals, to an additional 10% federal tax. For nonqualified contracts, an additional 3.8% federal tax may apply on net investment income.