Legislation Would Promote Retirement Savings
WASHINGTON, D.C., April 11, 2017 – The Insured Retirement Institute (IRI) released the following statement from IRI President and CEO Catherine Weatherford after the Lifetime Income Disclosure Act was introduced in the House and Senate.
This bipartisan legislation would require employer-sponsored retirement plans to provide estimates of how much lifetime income can be generated from a plan participant’s existing retirement savings accounts.
“At a time when American savers are shouldering more of the burden of planning for their retirement themselves, legislation which increases consumer education is vital to ensuring financially secure retirements. The legislation introduced today by Representatives Luke Messer (R-IN) and Mark Pocan (D-WI) and Senators Johnny Isakson (R-GA) and Chris Murphy (D-CT) would provide Americans with a visualization of how much their current savings will provide in their retirement years, as well as a better understanding of their savings options.
“IRI strongly supports initiatives, such as the Lifetime Income Disclosure Act, which provide retirement savers with the tools necessary to make informed financial decisions — as outlined in our 2017 Retirement Security Blueprint. An IRI study showed that nine in 10 workers want these estimates on their benefit statements and find the information helpful in planning for their futures. Additionally, more than 75 percent of plan participants in our study said they would increase their plan contributions by four percentage points or more after seeing lifetime income estimates.
“The introduction of this legislation comes during National Retirement Planning Week 2017. Throughout this week, IRI and our coalition partners are urging Americans to “rethink retirement.” The Lifetime Income Disclosure Act provides an excellent opportunity for a redirection in retirement thought and provides American savers with the resources necessary to achieve a financially secure retirement.
“We thank Congressman Luke Messer, Congressman Mark Pocan, Senator Johnny Isakson, and Senator Christopher Murphy for their leadership on this issue and we urge all Members of Congress to support this legislation. We welcome the opportunity to work with Members of Congress to advance this cause.”
Excerpts from the IRI Consumer Preferences Study
- Survey Objectives
- IRI and the Department of Labor want to understand how 401(k) plan participants would react to the addition of retirement income estimates to their plan statements
- The primary objective was to understand how participants felt about the information participants want on their benefit statements, and what actions they would take upon viewing income estimates
- Secondary objectives were to understand the extent to which participants are aware of their current retirement readiness and what steps they have taken, or would take, to increase their preparedness
- Key Messages
- Plan participants overwhelmingly want to see illustrations of estimated retirement income on their benefit statements.
- Providing illustrations of estimated retirement income will drive plan participants to increase their savings by significant amounts.
- Different plan participants want different information about how much lifetime income their savings might generate, and plan sponsors should have the flexibility to provide that information in the way their employees want it.
- Plan participants want the ability to create more personalized estimates using on-line retirement planning and income calculators and tools.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more here.