At the White House Conference on Aging, President Obama noted that, in every budget since taking office, he has put forth proposals to provide access for 30 million Americans to workplace-based retirement savings by requiring employers not currently offering a retirement plan to automatically enroll their workers in an IRA.
He pointed out that in the absence of Congressional action, states are leading the charge. Several states have passed measures to create a state-run plan for private-sector employees. However, Obama says states remain concerned about a lack of clarity regarding preemption by the Employee Retirement Income Security Act (ERISA).
The president announced that by the end of the year, the U.S. Department of Labor (DOL) will publish a proposed rule clarifying how states can move forward, including with respect to requirements to automatically enroll employees and for employers to offer coverage.
Also announced at the conference, the Social Security Administration (SSA) is providing individuals with an easily transferrable data file with the information contained in their monthly Social Security benefit statement, and has released a guide to help developers understand how they could incorporate the data into new software. A fact sheet from the White House says new tools utilizing this information could combine it with self-reported information about an individual’s retirement savings in defined contribution (DC) plans and individual retirement accounts (IRAs) to help individuals understand the amount of resources they will have available, determine how much to save, and figure out when to claim Social Security benefits, among other important financial planning and retirement decisions. Betterment, Financial Engines, and HelloWallet Holdings (a Morningstar Company) have committed to developing software incorporating the new data from SSA.
Concurrent with the conference, the DOL issued guidance clarifying that an employer’s fiduciary duty to monitor an insurer’s solvency generally ends when the plan no longer offers the annuity as a distribution option, not when the insurer finishes making all promised payments. The White House said the guidance should encourage more employers to offer lifetime income annuities as a benefit distribution option in their defined contribution (DC) pla