Department of Labor Receives Guidance on Regulatory Issues Surrounding Annuities as Retirement Benefits

In response to proposed legislation aiming to make it easier for plan sponsors to offer guaranteed lifetime income products to defined-contribution plan participants, the U.S. Department of Labor’s ERISA Advisory Council solicited guidance on how to remove existing regulatory uncertainties. Specifically, the department sought clarification on safe harbor aspects of annuity selection and input on the possibility of modifying the Qualified Default Investment Alternative rule to focus on asset accumulation and decumulation issues in the context of lifetime needs and solutions.  Our firm testified on these issues before the council and observed that the conversation about retirement incomes needs more emphasis on 401(k) and other defined contributions.