Happy Friday, readers! If you have been following the industry news this week, you’ll already know that there has been some significant action in Congress on retirement-focused legislation. Among the many provisions being considered in the SECURE Act and RESA is a new safe harbor to protect retirement plan fiduciaries when they offered in-plan guaranteed income products. Experts agree that plan sponsors often skip lifetime income products in plan menus because they are concerned about their own liability should the insurance provider fail to meet their payment obligations at some point in the future. You can read all about this evolving topic in the articles collected below.
Experts suggest an additional annuity safe harbor regulation is unlikely and perhaps even unneeded for promoting greater use of in-plan lifetime income solutions, given that sponsors’ hesitation is often misplaced.
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Eight in 10 DC plan participants are very or somewhat interested in an in-plan investment option that would guarantee monthly income for life in retirement, and the same number express interest in taking money out of their plan at retirement and moving it to a financial product that would guarantee them monthly income for life.
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The Department of the Treasury and the Internal Revenue Service have issued guidance designed to expand the use of income annuities in 401(k) plans.
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Concerns expressed in a survey included fiduciary exposure, high costs and operational hurdles such as recordkeeping issues, among other things.
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Principal is incorporating capabilities from the Wells Fargo Institutional Retirement and Trust platform into its own proprietary recordkeeping system, which will serve Principal and transitioning Wells Fargo customers moving forward.
With the acquisition of Washington Financial Group, HUB International has made public the first of a series of significant anticipated acquisitions of Global Retirement Partners firms.
Washington insiders say Senator Ted Cruz is probably the biggest roadblock to the SECURE Act being passed in the near-term under unanimous consent; among other issues, he wants the bill to allow people to use tax-advantaged 529 college savings accounts to pay for home school expenses.
