In response to the request for information from the U.S. Department of Labor (DoL) and the Department of the Treasury, General Counsel Larry Goldbrum of The SPARK Institute argued the retirement services industry is already developing lifetime income solutions. The SPARK Institute said regulators should allow investment managers, product providers, recordkeepers, plan sponsors, and others in the retirement plan community to continue to develop products, services, and tools for participants before considering mandates.
“We urge the agencies to maintain a competitive environment where a diverse mix of solutions is available, with plan sponsors and participants retaining the discretion to voluntarily adopt the options that best suit their needs,” said Goldbrum, according to a news release. “The SPARK Institute is developing standards that can be used by various lifetime income providers in exchanging data with retirement plan recordkeepers. This will help mitigate the challenges faced by all the product providers in obtaining and exchanging information from unaffiliated customer-facing plan recordkeepers.”
The SPARK Institute also contended that the DoL should clarify and broaden the safe harbor for selecting annuity providers to help plan sponsors overcome concerns about potential fiduciary liability.
Furthermore, SPARK said the DoL should issue guidance specifically stating that providing information about lifetime income options, available both inside and outside of the plan, will not cause a plan sponsor or service provider to become an investment fiduciary.
The SPARK Institute document is available at www.sparkinstitute.org/comments-and-materials.php.