Lifetime Income Highlighted by Treasury; New Retirement Plan Fee Disclosure Rules from Labor
Washington, D.C. (February 2, 2012) — American workers will be better able to access annuities and address their lifetime retirement security needs under a series of steps taken today by the U.S. Treasury and Labor Departments, said the American Council of Life Insurers (ACLI).
Treasury’s actions will make it easier for workers participating in employer-sponsored retirement plans to use a portion of their savings to acquire an annuity that offers guaranteed income for life. Treasury would eliminate some of the burdens that discouraged retirement plans from offering annuity options to participants.
“Treasury has advanced a major plan to address our nation’s retirement income crisis. Millions of American workers are not prepared for the challenge of managing assets through a lengthy retirement. They face a real risk of outliving their assets, possibly facing economic hardship at one of the most vulnerable stages of their lives. Helping today’s workers achieve lifetime retirement income can help avert a crisis in the years ahead, when much of the baby boom generation will leave the workforce,” said ACLI President and CEO Dirk Kempthorne.
Today’s actions follow a Treasury-Labor Department “Request for Information” published in 2010 on ways to encourage lifetime retirement income options. ACLI’s response focused on the unnecessary administrative burdens faced by retirement plans that want to offer annuity options to participants.
“Treasury wisely recognized the need to help people secure a stream of income they could not outlive. We are gratified that Treasury responded to many of our suggestions. Our common goal should be to help assure the financial security of American workers throughout their retirement years,” Kempthorne said.
Also, the Labor Department today issued a final rule that will enhance disclosure of the benefits offered and the fees charged by retirement plan service providers.
Under the DOL rule, employers will receive information from service providers under uniform rules for describing the costs and benefits of plan products and services. The rule takes effect July 1.
“Life insurance companies provide outstanding service and excellent value to retirement plans. We hope the new rule will help employers recognize the benefits life insurers can offer plans,” he said.
Information about the steps taken today can be found at:
Treasury Fact Sheet
White House Council of Economic Advisors Report
The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association with more than 300 legal reserve life insurer and fraternal benefit society member companies operating in the United States. ACLI members represent more than 90 percent of the assets and premiums of the life insurance and annuity industry. In addition to life insurance and annuities, ACLI member companies offer pensions, 401(k) and other retirement plans, long-term care and disability income insurance, and reinsurance. ACLI's public Web site can be accessed at www.acli.com.