Lawmakers Introduce Legislation to Increase Plan Access and Lifetime Income

In addition to expanding access to MEPs, the bill would facilitate lifetime income disclosure and clarify the current annuity selection safe harbor.

U.S. House Representatives Ron Kind, D-Wisconsin, and Dave Reichert, R-Washington, introduced The Small Businesses Add Value for Employees (SAVE) Act of 2017, H.R. 4637.

According to a statement from Kind, the bill would encourage more small businesses to offer retirement savings plans to their employees. The bill removes the “common bond” requirement for multiple employer plans (MEPs), enabling small businesses to pool together, regardless of industry, to offer retirement plans to their employees.

A statement from the American Council of Life Insurers (ACLI) President and CEO Dirk Kempthorne, says, “The Small Businesses Add Value for Employees (SAVE) Act of 2017 provides practical solutions for Americans’ retirement security challenges. As ACLI’s Assessing Americans’ Financial and Retirement Security study shows, employees with access to employer-sponsored workplace retirement savings accounts are more likely to save for retirement. Every day between now and the year 2030, 10,000 people will reach age 65. They need education about their savings and access to lifetime income solutions.”

ACLI also noted that the bill would:

  • Facilitate Lifetime Income Disclosure. This provision will help participants better understand how their retirement savings could translate into monthly income at retirement.
  • Clarify the Current Annuity Selection Safe Harbor. Under this provision, a key employer concern will be addressed with respect to adding an annuity option to a retirement plan. When evaluating insurance companies to provide an annuity to a plan, employers will be able to rely on specific representations from the insurer regarding state insurance regulator oversight and review.
  • Expand MEPs. The provision encourages and helps employers not yet prepared to sponsor their own retirement plans to join together to achieve economies of scale and receive advantages with respect to plan administration, which will increase retirement plan access.