Retirement Plans

Overview

The private retirement system provides a robust and growing foundation for millions of Americans’ retirement security through defined contribution plans, such as 401(k)s, as well as IRAs and individual annuities. In fact, nearly 80% of full-time workers have access to workplace retirement plans and more than 80% of those with access participate in the plans. Employer-based retirement plans play a vital role in creating a safe and secure retirement. To help even more American families prepare for retirement, the life insurance industry is committed to working with policymakers to advance balanced solutions to expand access and increase savings.

ACLI Position

ACLI supports proposals that create more choices for employers and workers, encourage participation in workplace-based plans and IRAs, and promote increased use of annuities to guarantee lifetime income. We strongly support proposals that call on employers to annually illustrate the monthly income workers can expect in retirement based on their current retirement savings account balances. We also support issuing regulatory guidance to facilitate the use of annuities in retirement plans.

Policymakers should continue to explore ways to encourage Americans to plan for a lifetime income in retirement. ACLI supports educational initiatives that highlight the role annuities can play in helping workers save and guarantee lifetime income in retirement—especially those without access to workplace retirement plans.

Today's workers face two hurdles: how to accumulate savings for retirement and how to manage savings to last throughout retirement. Annuities offer solutions to both sides of the retirement equation. They provide ways to save and then can turn savings into a steady stream of income for life.

There has been increased interest among policy-makers about the role annuities play in creating lifetime income in retirement. In 2014, the IRS and U.S. Department of Treasury made it easier Americans to access guaranteed lifetime income options. New rules were released to encourage Americans’ use of longevity annuities—products that protect those planning for the long-term by providing payments at later ages, for example, at age 85. The new rules enable these products to be provided in 401(k) plans and IRAs.

Notably, our nation's largest employer—the federal government—in 2011 began to annually illustrate to participants in its defined contribution plan (the Thrift Savings Plan) how much monthly annuity income workers can expect in retirement from current account balances.

We support initiatives that encourage defined contribution plan sponsors to include annuity distribution options in their plans. ACLI also supports the Lifetime Income Disclosure Act, which would require defined contribution plan sponsors to provide workers with an illustration of how their retirement savings translate into guaranteed monthly income payments in retirement. This provision, as well as provisions that would clarify the current annuity selection safe harbor and provide lifetime income portability, were included in the Retirement Enhancement and Savings Act of 2016 (RESA), which unanimously passed the Senate Finance Committee on September 21, 2016.

Congress should pass the provisions in RESA. This legislation would upgrade the successful private-sector retirement system.

 

Publications and Resources

The Retirement Enhancement and Savings Act (RESA) 
(September 2018) In September 2016, the Senate Finance Committee unanimously passed the Retirement Enhancement and Savings Act (RESA). ACLI supports this bipartisan effort to enhance retirement savings. In September 2018, the House Ways and Means Committee passed The Family Savings Act of 2018 (H.R. 6757), which contained some, but not all, RESA provisions. ACLI urges the House to include RESA in a final retirement package this year.

ACLI Statement: Financial Literacy: The Starting Point for a Secure Retirement
(August 2018) ACLI submitted a statement for the record regarding financial literacy and potential improvements to the retirement system in the United States to the U.S. Senate Committee on Health, Education, Labor & Pensions Subcommittee on Primary Health and Retirement Security. Download the full statement (PDF).

National Retirement Planning Week (NRPW)
(April 2018) National Retirement Planning Week is April 9-13, 2018. Life insurers are leading providers of retirement solutions, including 401(k)s, 403(b)s, 457s, IRAs, and annuities, managing 18 percent of all defined contribution plan assets and 14 percent of all IRA assets. More than 16 percent of Americans' long-term savings is in permanent life insurance and retirement annuities.

Variable Annuities: Consumer Information
(March 2018) A variable annuity is a unique retirement product offered by life insurers that helps people grow their savings tax-deferred and offers a guaranteed stream of lifetime income in retirement. Learn more from ACLI's downloadable PDFs

Assessing Americans' Financial and Retirement Security
(September 2017) Assessing Americans' Financial and Retirement Security is a comprehensive analysis by ACLI that presents a high-level snapshot of Americans' current state of financial and retirement security. Learn more here

For older publications and resources, go to the archive page.

ACLI Guides: Understanding Retirement Plan Fees

Guide for Participants
Retirement Plan Fees Disclosed in New Format
ACLI developed a guide to help you understand the fees associated with managing and servicing your workplace retirement savings plan. It describes the fee information you receive annually and explains how to compare the true costs of different investment options. Download the Guide (PDF).

Guide for Fiduciaries
Employers: Understanding Retirement Plan Fees
Under new Labor Department rules, employers now receive more detailed information about the fees and expenses associated with their retirement plans. ACLI developed a guide to help employers understand the requirements and better compare the fees charged by different service providers. Download the Guide (PDF).

See Also

ACLI Letter to Sponsors of the Increasing Access to a Secure Retirement Act of 2017
ACLI supports the Increasing Access to a Secure Retirement Act of 2017 (H.R. 4604), which would help more individuals access guaranteed lifetime income in retirement by clarifying and strengthening existing rules for employers when selecting an annuity provider. ACLI wrote to thank the sponsors of the legislation: Reps. Tim Walberg (R-MI) and Lisa Blunt Rochester (D-DE). 2/08/2018

Letter to House Sponsors

ACLI Letters to Sponsors of the Lifetime Income Disclosure Act
ACLI supports the Lifetime Income Disclosure Act, (S. 868 and H.R. 2055), which would give workers an important new information resource to help them boost their retirement security. ACLI wrote to thank the sponsors of the legislation: Sens. Johnny Isakson (R-GA) and Chris Murphy (D-CT) and Reps. Luke Messer (R-IN) and Mark Pocan (D-WI). 4/06/2017

Letter to Senate Sponsors

Letter to House Sponsors