In December 2022, Congress passed the Secure 2.0 Act of 2022. Among other provisions, the law now allows a one-time transfer of up to $53,000 directly from an IRA to fund a charitable gift annuity.  

We know that many have substantial sums in IRAs, and dozens of constituents directly funded a Pomona Plan charitable gift annuity with IRA assets in 2023, the first year this option was available. 

The law created a new life-income “qualified charitable distribution” or “QCD” with the following parameters:  

• Available to those age 70½ or older;
• The annuity can be at our standard Pomona Plan annuity rates; 
• In 2024, the maximum qualifying IRA distribution is $53,000. The provision is for one-time use, so it will often make sense to use the full $53,000 to fund the Pomona Plan gift annuity; 
• The IRA distribution is a true tax-deferred rollover, with income recognized only as you receive annuity payments; the payments will be 100% taxable as ordinary income since the IRA funds have not been taxed previously; 
• The IRA distribution will qualify toward your IRA required minimum distribution (or “RMD”);  
• The annuity can benefit the IRA account owner, the owner’s spouse, or both individuals; and 
• The annuity payments must commence within one year of the date of funding. 

As with our standard Pomona Plan charitable gift annuity, an IRA gift annuity provides fixed payments for life in exchange for a gift of IRA assets transferred directly to Pomona College. Gift annuities are easy to set up and the payments you receive are backed by the general resources of Pomona College.

Contact us to learn more or to request a formal proposal for an IRA Gift Annuity