Washington, D.C. (September 21, 2016) – American Council of Life Insurers (ACLI) President and CEO Dirk Kempthorne commended the Senate Finance Committee, including Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) for passing bipartisan legislation, The Retirement Enhancement and Savings Act of 2016, a measure to bolster Americans’ retirement security.

“The Retirement Enhancement and Savings Act of 2016 provides practical solutions for Americans’ retirement security challenges,” said Governor Kempthorne. “Every day between now and the year 2030, 10,000 people will reach age 65. American workers should have greater access to employer plans to help them save for their retirement. They need education about their savings and access to lifetime income solutions.”

One provision of the bill expands multiple-employer plans (MEPs), which will expand retirement plan access. The provision encourages and helps employers not yet prepared to sponsor their own retirement plans to join together to achieve economies of scale and receive advantages with respect to plan administration. Senators Susan Collins, (R-ME), and Bill Nelson, (D-FL), originally introduced the legislation.

The committee also adopted retirement security provisions that:

• Facilitate Lifetime Income Disclosure. This provision will help participants better understand how their retirement savings could translate into monthly income at retirement. Senators Johnny Isakson, (R-GA), and Chris Murphy, (D-CT), originally introduced the legislation.
• Clarify the Current Annuity Selection Safe Harbor. Under this provision, a key employer concern will be addressed through this provision with respect to adding an annuity option to a retirement plan. While still obligated to prudently select a provider and an annuity, when considering an insurer’s financial capability, employers will be able to rely on specific representations from the insurer regarding the plan’s status in relation to state insurance regulation and enforcement.
• Provide Lifetime Income Portability. To continue lifetime income protections in the event of a sponsor-initiated change, this provision permits participants to roll over lifetime income options to an IRA that provides the same or similar lifetime income protection.

“Chairman Hatch introduced legislation in the last Congress on the safe harbor clarification and portability. These provisions in The Retirement Enhancement and Savings Act of 2016 are particularly timely as they address concerns raised in a new General Accounting Office report that recommends steps the Department of Labor can take to improve lifetime income options for plan participants,” said Governor Kempthorne.