Two industry groups, the Defined Contribution Institutional Investment Association (“DCIIA”) and the Retirement Income Industry Association (“RIIA”), are launching a joint effort to promote greater awareness and participation in retirement programs.
This joint initiative will be known as the Defined Contribution Retirement Income Coalition (“DCRIC”) and foster collaboration between financial services and retirement industry firms in the development of retirement income products as well as encourage widespread inclusion of life income options in defined contribution plans.
RIIA executive director Francois Gadenne stated that the “broad mission” of the initiative “is to create a framework that helps participants to effectively use the assets they’ve accumulated inside of their qualified plans to pay themselves during their retirements."
The launch follows recent initiatives by the Obama Administration to broaden the introduction of lifetime income programs for 401(k) and defined contribution savers. On February 2nd the Treasury Department issued a package of regulatory guidance on the topic of lifetime income options in qualified plans. This guidance follows a two-year project with the Department of Labor on the topic, which included both a request for information and public hearings, with a number of firms and associations participating within the DCRIC initiative.
In a statement, DCRIC chair Drew Carrington said that the Treasury’s regulatory guidance package “will go a long way toward removing any remaining uncertainty plan sponsors and their advisors have about the overall view of regulators with respect to lifetime income option availability in qualified plans such as 401(k)’s.”
“The issuance of guidance on this topic, especially the strong endorsement of lifetime income options embedded in the various regulations, as well as the announcement itself, answers clearly the question of how the regulators feel about these alternatives in a qualified plan setting,” he stated.
The mandate for the DCRIC, among other things, includes promoting the delivery of lifetime income solutions to a broad segment of US workers participating in defined contribution plans via the following initiatives, building coalitions to support these efforts and identifying and removing barriers to the adoption of lifetime income products.
In a related development, Peng Chen, president of Morningstar’s Investment Management division, has joined the Curriculum Advisory Board for the Retirement Management Analyst designation, Gadenne announced.