When the SECURE Act was approved by Congress in late 2019, it was hailed as a landmark retirement savings bill. The Insured Retirement Institute is advocating for an encore this year.
The organization, which represents life insurers, asset managers and distributors of lifetime income products, is pushing lawmakers to approve legislation that will continue to expand access to workplace retirement plans and provide greater latitude to use annuities within them.
“Our advocacy on Capitol Hill in this year ahead will be focused on advancing another comprehensive retirement security bill, to continue to help strengthen retirement security for American workers and retirees,” IRI chief executive Wayne Chopus told reporters Thursday. “The legislation that we seek will focus on measures that create opportunities for workers to gain access to retirement plans and then, of course, expand the use of protected guaranteed lifetime income.”
The organization rolled out its 2021 Federal Retirement Security Blueprint, which contains 30 measures that are on its lobbying agenda.
Paul Richman, IRI chief government and political affairs officer, said 11 of the provisions in the IRI blueprint have been included in bills that were introduced last year to follow up on the SECURE Act that are expected to be reintroduced in the new Congress that began in January. They are the Retirement Security and Savings Act, the Securing a Strong Retirement Act and the Improving Access to Retirement Savings Act.
The IRI is also pushing two bills that were introduced in the previous Congress that would make it easier to use annuities in retirement plans — the Lifetime Income for Employees Act and the Registration for Index Linked Annuities Act. Richman said the measures are also likely to be reintroduced. Unlike most other legislation, retirement savings bills tend to draw bipartisan support.
Annuities are an answer to one of the most vexing worries that Americans face — outliving their money in retirement, IRI leaders said.
“There is no other financial product today that offers the benefits and the security and the peace of mind that annuities provide,” Chopus said.
ANNUITY COMPLEXITY, FEES
But annuities also are cited often as products that can harm investors because they tend to be complicated and costly. They can have a place in retirement planning, but there need to be more safeguards tied to them, said Birny Birnbaum, executive director of the Center for Economic Justice.
“The majority of annuities that are sold are high-fee, complex, difficult to understand products,” Birnbaum said. “What’s needed is protection to create more confidence in consumers to buy these plans.”
With the widespread replacement of defined-benefit plans by more unpredictable defined-contribution plans, the atmosphere is right for increasing use of annuities, said IRI spokesman Dan Zielinski.
“The need for guaranteed income has never been greater,” Zielinski said. “We also support effective consumer protection regulations.”
The IRI is a leading proponent of the Securities and Exchange Commission’s Regulation Best Interest, the broker investment advice standard, the National Association of Insurance Commissioners’ reformed annuity suitability rule and the Department of Labor’s investment advice rule for retirement accounts.
Jason Berkowitz, IRI chief legal and regulatory affairs officer, said the three regulations combine to provide consumer protection while allowing wide access to financial advice. Critics say all three fall short of a fiduciary standard for consumers.
“The SEC, DOL and NAIC have widely recognized that the fiduciary model is incompatible with the preservation of different advice models that can meet the needs of different consumers,” Berkowitz said.
In a 2019 comment letter on the NAIC rule, the Center for Economic Justice and the Consumer Federation of America asserted that it is insufficient for curbing conflicts of interest related to annuity sales.
The IRI is pushing for the adoption of the NAIC annuity rule nationwide. It has been approved in six states, and similar legislation or regulations have been proposed in 10 others.
The IRI spent $540,000 lobbying Congress in 2020, up from $440,000 in 2019. The organization contributed $275,500 to 2020 campaigns of federal lawmakers, an increase from $272,500 in the 2018 campaign cycle.
Investors increasingly want to know the impact bonds have on the world
The post Insured Retirement Institute wants more worker access to plans, annuities appeared first on InvestmentNews.
As our second lead editor, Cindy Hamilton covers health, fitness and other wellness topics. She is also instrumental in making sure the content on the site is clear and accurate for our readers. Cindy received a BA and an MA from NYU.