A Kohl news release said the intent of the hearing was to take a close look at the decisions plan participants must make in a defined contribution world to ensure they can have a secure retirement. Kohl expressed his interest in drafting legislation to make it easier for employers to offer lifetime income options to workers.
“So far, the focus of most of our education efforts have been on encouraging people to save, but we have done little to help the average retiree make the difficult choices about how to make their savings last,” said Kohl, in the announcement. “With Americans living longer, the stakes are high for not adequately managing one’s savings.”
At the hearing, Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis Borzi and Deputy Assistant Secretary for Retirement and Health Policy at the Treasury Department Mark Iwry presented their early analysis of responses they have received to their joint Request for Information (RFI) about the lifetime income options (see “DoL Set to Issue Annuity Project RFI“).
Much of the hearing focused on annuity products. While annuities may be the right fit for some retirees, they can also be highly complex and, in the retail market, they have often been associated with aggressive sales tactics, Kohl said in the news release.
Finally, Kohl sent a letter to the Government Accountability Office (GAO) requesting that it conduct a review of how the current regulatory structures ensure that institutions that sell annuities will be able to meet the financial commitments they entail, and the types of state guarantee funds that exist to protect purchasers of annuities, including how they are structured, how they are monitored, and the circumstances under which they have been used to compensate owners of annuities.
Borzi’s testimony is online here.