The Insured Retirement Institute (IRI) has expressed support for the Lifetime Income for Employees (LIFE) Act (H.R. 3942), stating that its enactment is a priority as it offers improved lifetime income products access.
According to IRI, the bill would eliminate a barrier to offering certain lifetime income products as default investment choices in retirement plans.
“Workers and retirees are anxious about their ability to accumulate sufficient savings to provide them with income that will last throughout their retirement years,” IRI Chief Government and Political Affairs Officer Paul Richman said. “Allowing for higher-yielding lifetime income products with delayed liquidity features to be offered as part of the default, in addition to the existing annuities that are currently available as default investments, would help further address the risk of retirees not having enough income in retirement.”
Additionally, the IRI maintains the legislation introduced by Reps. Donald Norcross (D-NJ) and Rep. Tim Walberg (R-MI) would allow retirement plan sponsors to use lifetime income solutions possessing delayed liquidity features, resulting in better returns as qualified default investment alternatives (QDIA) for a portion of contributions made by participants who have not made investment selections.
“Current Department of Labor regulations governing QDIAs have created a barrier to using certain investments that do not meet specific liquidity requirements,” Richman said. “The regulations have created an environment where savers who utilize their plan’s QDIA have to use a lower-yielding version of annuities than could otherwise be available.”
The IRI cited a recent Gallup poll maintaining Americans worry most about having enough money for retirement, with over seven out of ten non-retired adults being at least moderately worried about funding their retirement.