DoL Discusses Lifetime Annuity Income Project

The U.S. Department of Labor (DoL) said it is investigating how it can best encourage the use of lifetime annuities or other similar instruments.

In a written summary of planned regulations released today, the DoL suggested the lifetime retirement income stream might ultimately become a consideration in judging the behavior of fiduciaries under the Employee Retirement Income Security Act (ERISA).

“These initiatives are intended to assure retirement security for workers in all jobs regardless of income level by ensuring that financial advisers and similar persons are required to meet ERISA’s strict standards of fiduciary responsibility and helping to ensure that participants and beneficiaries have the benefit of their plan savings throughout retirement,” the DoL document said.

Also today, DoL Secretary Hilda L. Solis kicked off a three-day series of live Web chats featuring department officials discussing the planned regulations in a variety of regulatory areas including the Employee Benefits Security Administration (EBSA), which oversees retirement plans and other workplace benefit programs. EBSA chief Phyllis Borzi, an assistant secretary, is scheduled for a similar Web session December 9 at 10 a.m.

“We’re looking at whether people might not be able to get their money in a monthly check (in a stream) that will last their lifetime so they won’t have to worry about it,” Borzi said in a brief video statement about the annuity project. “We’re trying to get all of the interested parties talking to each other and to us to help craft a rule that will be beneficial for everyone.”  

The annuity project was at the suggestion of the department’s ERISA Advisory Council and others, and action on the project is expected in January, the DoL said.

Investment Advice

The agency also addressed reformulating a new investment advice rule. DoL recently delayed and then withdrew a Bush Administration-era rule (see “EBSA Pulls Back Controversial Advice Mandate” and “Investment Advice Regs: Interview with Bradford Campbell”)

In her Web chat today, Solis said the agency was reacting to concerns raised by members of the public (see “Investment Advice Regs: Interview with NAPFA”). “As you may know, a number of concerns were raised regarding the investment advice regulation published by the prior administration,” Solis wrote to one questioner. “In an effort to address these concerns, we decided the best course of action is to take a fresh look and publish a new proposal more closely following the statutory provision enacted by the Congress. We hope to have this proposal published in the very near future.”