The Labor and Treasury Departments have issued a request for information to determine whether annuities belong in 401(k)s. Specifically, the agencies want to know the benefits and the drawbacks to receiving retirement income in installments.
Last week, President Obama’s Middle Class Task Force issued a fact sheet saying the administration is interested in promoting the “availability of annuities and other forms of guaranteed lifetime income which transform savings into guaranteed future income, reducing the risks that retirees will outlive their savings.”
The American Council of Life Insurers issued a statement applauding the government for promoting the use of annuities in defined contribution plans, with ACLI President and CEO Frank Keating saying, “The ACLI supports policies that both encourage employers to offer annuities in their retirement savings plans and encourage employees to recognize the importance of receiving a guaranteed lifetime income in retirement. We look forward to responding to the departments’ request for information.”
The Insured Retirement Institute is also forming a working group to address the RFI.