Maintaining a competitive environment is critical to the continuing development of new lifetime income solutions for employer-sponsored retirement plans, the SPARK Institute said in a joint letter to the Department of Labor and the Department of Treasury.
"We urge the Agencies to maintain a competitive environment where a diverse mix of solutions is available, with plan sponsors and participants retaining the discretion to voluntarily adopt the options that best suit their needs,” said Larry Goldbrum, the SPARK Institute's general counsel.
“The SPARK Institute is developing standards that can be used by various lifetime income providers in exchanging data with retirement plan record keepers,” he said. “This will help mitigate the challenges faced by all the product providers in obtaining and exchanging information from unaffiliated customer-facing plan record keepers.”
Goldbrum said one of the biggest barriers to the development of these products is the industry's concern about fiduciary standards and liability. He said the agencies can mitigate these concerns by providing clear guidance and safe-harbor relief.
"The DOL should issue guidance specifically stating that providing information about lifetime income options, available both inside and outside of the plan, will not cause a plan sponsor or service provider to become an investment fiduciary," the SPARK Institute said in answer to a request for information. "Without clear and permissive guidance, plan sponsors will most likely be unwilling to provide participants with any information that could cause the plan sponsor to assume additional fiduciary responsibility with respect to participant decisions about retirement income products."