ING Encourages Use of Guaranteed Income Options in Retirement Plans

ING said it broadly supports investing in guaranteed lifetime income options within a retirement plan and strongly encourages employers to add this type of feature to their plans.

However, in its response to the government’s request for information on lifetime income options for participants and beneficiaries in retirement plans, ING said it believes it is essential that employers and those serving as plan fiduciaries be given the benefit of a streamlined fiduciary standard with more objective criteria than exists today under Employee Retirement Income Security Act (ERISA) regulations. In addition, ING said some of the administrative burdens that come with carrying annuities need to be eased in order to attract more employers to offer these types of products. 

While ING favors steps that would remove barriers to adding guaranteed lifetime income distribution options as well as provide incentives for these products, it does not believe the use of the products should be mandated. 

According to ING’s response, in order for more Americans to embrace and understand the use of guaranteed lifetime income options, more needs to be done in terms of financial literacy and education.  “When individuals are participating in a workplace plan, it is often the best time—and for many, the only time—to reach them with materials, resources, and communications that can increase their financial literacy and positively influence their behavior,” ING said.  

ING noted that plans that offer lifetime income distribution strategies tend to present this option to employees as an “all or nothing” decision with respect to their account balance, so it favors steps that would encourage employers to make the election decision easier by encouraging individuals to complete a financial plan and then commit only an appropriate portion of their account balance to a guaranteed income stream, while retaining control of the uncommitted balance.