Treasury Department Recommends IRI Retirement Security Policies

Posted on October 27, 2017

Treasury Department Recommends IRI Retirement Security Policies

New report calls for changes to expand access to lifetime income

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) released the following statement from IRI President and CEO Cathy Weatherford in response to the Department of the Treasury’s endorsement of several of IRI’s retirement security policy initiatives in a report to President Trump.

“At a time when Americans are shouldering primary responsibility for providing their own financial security in retirement, we need public policies designed to increase access to and encourage use of lifetime income products. IRI commends the Department of the Treasury for including several common-sense retirement security policies from IRI’s 2017 Retirement Security Blueprint in its report, A Financial System that Creates Economic Opportunity: Asset Management and Insurance. This summer, IRI met with staff at Treasury to explain how the policies included in our Blueprint would improve retirement readiness across the country, and we are extremely encouraged to see so many of those policies being recommended in this report.

In this report, Treasury calls on the Department of Labor (DOL) to make much-needed changes to the rules for employers who want to make lifetime income products available to employees through their retirement plans. Employers currently must determine whether a particular insurer will be able to satisfy all their financial obligations in the future before adding an annuity offered by that insurer to their plan. Employers have understandably been hesitant to take on that responsibility, making it harder for their employees to get access to sources of guaranteed lifetime income. Treasury's recommendation would help clear that obstacle by allowing employers to rely on independent fiduciaries to evaluate an insurer's financial condition.

Treasury also recommends that the Securities and Exchange Commission (SEC) adopt a variable annuity summary prospectus, which IRI has been seeking for nearly a decade. Our research has shown that a summary prospectus for variable annuities would improve consumers' understanding of their investment choices and reduce the regulatory burden by streamlining disclosures, therefore facilitating better decision-making regarding lifetime income products.

In addition to these recommendations, the report expresses support for the ongoing review of the DOL fiduciary rule and the proposal to delay the rule's applicability date while that review is being conducted, and urges the DOL, SEC, and the state insurance regulators to work together on standards of conduct for the annuities market. Given the extensive evidence IRI and others have provided to the DOL highlighting how the rule is depriving millions of Americans of access to a wide range of financial products and services, we wholeheartedly agree with Treasury's comments on this critically important subject.

IRI remains committed to working with Congress, Treasury, the DOL, SEC, state legislatures and regulators, and other regulatory agencies to advance these and other policies to make it possible for all Americans to plan for and achieve a secure and dignified retirement."


For a PDFof this release, click here.