Americans Want, Need Access to Lifetime Income Retirement Products
WASHINGTON, D.C. – In a letter to Representatives Tim Walberg (R-MI), Chairman; and Gregorio Kilili Camacho Sablan (Ind-MP), Ranking Member of the U.S House of Representatives Committee on Education and the Workforce, Subcommittee on Health, Employment, Labor and Pensions, the Insured Retirement Institute (IRI) expressed its support for the enactment of several common-sense, bipartisan measures included in its 2018 Retirement Security Blueprint and considered during a hearing the Subcommittee held earlier today to examine proposals to simplify and modernize retirement plan administration.
The proposals IRI endorsed will make retirement planning easier for millions of Americans through increased savings opportunities, expanded access to employer-provided retirement plans and offering more options for guaranteed lifetime income in retirement plans.
“Last month, we released our annual report, Boomer Expectations for Retirement, which found that monthly guaranteed income is the most important single trait Baby Boomers look for in a retirement investment, ranked number one or number two in importance by 41 percent,” said IRI Senior Vice President and General Counsel Lee Covington. “As a result, 8 in 10 Baby Boomers and GenXers believe that 401(k) plans should provide an option to take a portion of the account balance as guaranteed lifetime income, which is only possible by using an annuity.”
Only 1 in 4 feel ‘retirement-ready’
Also, the report found that only one in four baby boomers today believe they will enough money retirement. And that is why, in its letter of support, IRI urged the adoption of several measures that have broad support and impact:
- The Increasing Access to a Secure Retirement Act (H.R. 4604) is a bipartisan measure to establish clear guidelines for employers who want to include annuities in their retirement plan menus to meet the needs and demand of their workers. The current Department of Labor rule is a barrier to most employers offering lifetime income products because they don’t have the technical or financial resources to meet the unclear requirements of the rule. IRI supports this bill because it provides a workable and appropriate path for employers to meet their obligations when choosing an annuity provider.
- The Retirement Security for American Workers Act (H.R. 854) would enable small businesses to offer a retirement plan by increasing access to multiple employer plans, or – MEPs – for small employers and their employees. The legislation will allow small businesses to band together to offer their employees a retirement plan by joining a multiple employer plan.
- The RETIRE Act (H.R. 4610) will have a direct and beneficial impact on plans, plan sponsors, plan participants and beneficiaries, as it will make it more feasible for employee benefit plan sponsors and their service providers to use electronic communications instead of paper. Additionally, it is estimated the bill will reduce the communications costs for sponsoring a plan by 38 percent. At the same time, it continues to provide and maintains important safeguards to ensure participants who still want to receive required communications in paper format can do so.
In addition to being introduced as standalone bills, two of these legislative initiatives are included in H.R. 5282, the Retirement Enhancement and Savings Act (RESA). IRI believes the enactment of RESA will help Americans by expanding opportunities to save for retirement; increasing access to lifetime income products; helping savers make more-informed decisions about their finances for retirement; and enhancing features of workplace retirement plans.
The proposals included in RESA which the Subcommittee heard testimony on at the hearing are opening Multiple Employer Plans (MEPs) for small businesses; and increasing access to lifetime income options in workplace retirement plans by clarifying employers’ responsibility for selecting lifetime income products.
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 at www.irionline.org.