72 t/q friendly GMWB

{Edit: Guaranteed Minimum Withdrawal Benefit (GMWB) is a type of rider or contract attached to some annuity insurance policies. It guarantees the policyholder a steady stream of retirement income regardless of market volatility}

L1: 72 t/q friendly GMWBHello,
I was wondering if anyone had any information about 72 t/q friendly GMWB”s on variable annuities?
I”ve heard that Hancock”s GMWB is 72 t/q friendly GMWB but was wondering if anyone knew of any other carriers that may have the same provisions. For example, I know Hartford”s GMWB”s are not 72 t/q friendly.
Thanks in advance…2006-08-16 13:05, By: Jeff, IP: [66.238.228.130]

L2: 72 t/q friendly GMWBJeff:
You might look at Pacific Life and their GMWB (Income Access) rider. It allows 7% max per year and that will probably cover any 72 t/q distribution. You”ll have to calculate the SEPP Plan distribution dollar amountand be sure it is less than the max for the rider, then use the 72(t) withdrawal request form instead of the rider specific withdrawal request form. Talk with Customer Service and they can help you.
Jim2006-08-16 14:06, By: Jim, IP: [70.184.2.72]

L2: 72 t/q friendly GMWBI cannot locate any reference to the IRS Reg requiring calculation of the FMV for IRA annuity Roth conversions and RMDs that refer to the FMV for calculating a 72q SEPP program. Since the ruling does not appear to specify use for a 72q calculation, I would assume that the value used remains contract value without consideration of the value of added benefits. Anyone have anything else on this?2006-08-16 21:24, By: Alan S., IP: [24.116.165.157]

L2: 72 t/q friendly GMWBAlan:
I have read and re-read your post and I”m really confused as to your question. Maybe I”m missing something, but it doesn”t sound like your are responding to Jeff”s question. Are you trying to respond to Jeff or did you mean to start a new string? Please try again and includemore information to better explain what you are asking or what point your are trying to make.
Thanks.
Jim2006-08-17 15:59, By: Jim, IP: [70.184.2.72]

L2: 72 t/q friendly GMWBThanks, Jim.
I think the post does bring up a valid point with regards to “real” contract values vs. benefit amount values.
With that being said is it fair to say that so long as the calculationofthe SEPP Plan distribution dollar amountis less than the GMWB maximum withdrawal amount that that GMWB is 72 t/q friendly?
I apologize if these are basic questions. I do a lot of VA contract research and while the features and fees are my forte the tax/distribution side perplexes me at times.
Thanks!2006-08-17 16:06, By: Jeff, IP: [66.238.228.130]

L2: 72 t/q friendly GMWBWith that being said is it fair to say that so long as the calculationofthe SEPP Plan distribution dollar amountis less than the GMWB maximum withdrawal amount that that GMWB is 72 t/q friendly?
Short answer, YES. I believe you have the concept. You are actually running two separate issues in your original question … SEPP distributions and staying compliant with the GMWB rider.Tomorrow I will try to play with some numbers to create an example.
Jim2006-08-17 16:21, By: Jim, IP: [70.184.2.72]

L2: 72 t/q friendly GMWBWow, that would be incredible and I”d be so grateful!
Thanks.2006-08-17 16:23, By: Jeff, IP: [66.238.228.130]

L2: 72 t/q friendly GMWBJim,
As Jeff so indicated, the issue I referenced only involves the initial value if the amortization or annuity method is used, but would involve every year if the RMD method was used. The question is, since the Regs require the extra contract benefit values to be calculated and if they are in excess of a de minimum amount, any Roth conversion or RMD must reflect them. A 72q is not referenced in the ruling, but has some similar characteristics in that the distribution must meet lifetime related assumptions, and you might expect the account value would be similarly determined as in the conversion or RMD scenarios. But since the ruling does not specifically reference a 72q, it leaves the insurance company in limbo. I do not know what their opinion is, but I would feel quite secure as long as they provided the “2” code on the 1099R.2006-08-17 21:49, By: Alan S., IP: [24.116.165.157]

L2: 72 t/q friendly GMWBAlan S. and/or Jim
It was my understanding that the inclusion of the actuarial present value of any future benefit is to be incorporated into the calculation for an “RMD payment” (the type that is required when a person reaches age 70.5). Therefore, it stands to reason that even though the RMD calulation method may be used for SEPP payments, technically it is a SEPP payment that is being made and the actuarial present value portion of the calculation does not apply.
What are your thoughts on this?
Thank you,
Matthew2006-08-18 12:42, By: Matthew, IP: [165.30.52.64]