Officials from the Departments of Treasury and Labor want annuities to be a default option for workers who participate in employer-sponsored retirement plans such as 401ks.
At a recent industry conference, Treasury senior advisor Mark Iwry spoke of creating annuity-based lifetime income options within the defined contribution 401k arena.
Issues such as credit risk and portability continue to present obstacles to progress.
Employer fiduciary liability with respect to in-plan annuity selection is also a major hurdle. According to Assistant Labor Secretary Phyllis Borzi:
“It seems very difficult for me to think about how one could construct a safe harbor that would remove the basic duty under [the Employee Retirement Income Security Act of 1974] to prudently select and monitor the annuity provider without simply abrogating that responsibility and giving it to the participant,”
Source: Investment News
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