DCIIA Commends New Regulations That Support The Availability Of Lifetime Income Options Within Defined Contribution Plans
Washington, D.C. (PRWEB) July 17, 2014 -- DCIIA is pleased to see the Treasury Department take another important step forward in these efforts by issuing final regulations on the definition and use of qualified longevity annuity contracts (“QLACs”) in qualified plans. This important guidance, which follows a multi-year project with the Department of Labor on the topic (including an RFI, public hearings and proposed regulations), will help to pave the way for development of products and solutions that address retirees' and working Americans' needs to address longevity risk in their retirement.
DCIIA applauds the Treasury Department’s focus on this topic and the clarity this guidance brings to plan sponsors (and their advisors) looking to help plan participants more effectively manage the distribution phase of their retirement assets. Lew Minsky, Executive Director of DCIIA stated, “The issuance of guidance on this topic, especially the changes Treasury made after considering the public comments and testimony for the proposed regulations, signals much needed regulatory support for lifetime income options.” Minsky went on to state that “we hope that these new regulations will go a long way toward removing any uncertainty plan sponsors and their advisors have regarding regulatory support for the availability of lifetime income options within U.S retirements plans such as 401(k)’s.”
While DCIIA enthusiastically supports the commitment of both the Departments of Treasury and Labor in encouraging more robust and broad based adoption of lifetime income solutions in US retirement plans, there is still more work to do. There is a real need for innovation in the development of new products and solutions to manage longevity risk.
Plan sponsors can take steps to provide innovative lifetime income solutions to their participants based on this regulatory guidance.
DCIIA is committed to continue its work with and support of Treasury and Labor to identify and remove areas of regulatory uncertainty that are inhibiting greater adoption of lifetime income solutions and innovation. Additional regulatory guidance in this arena makes it both easier and simpler to implement these solutions in qualified plans. Such guidance can take many different forms, such as through interpretive guidance or information letters supporting different approaches or examples without necessarily needing to rely on simplistic safe harbors that can have the unintended consequences of inhibiting innovation by creating fear that other potentially better approaches may be inherently “un-safe” from a fiduciary perspective. A regulatory approach that includes a combination of thoughtful safe harbors and flexible examples can go a long way in driving home continued regulatory support for plan sponsor innovation.
Finally, DCIIA calls on the defined contribution community – sponsors, consultants, ERISA counsel, recordkeepers, investment managers, providers and insurance companies – to embrace the message behind these new regulations and to move toward more widespread adoption of additional tools for participants to use in managing the spending and distribution phase of their retirement. A few years ago, DCIIA partnered with the Retirement Industry Income Association (RIIA), to create the Defined Contribution Industry Coalition (DCRIC) with the broad mission of creating a framework that helps participants to effectively use the assets they have accumulated inside their employer- sponsored retirement plans to pay themselves during their retirements. Today, we renew our call to have other interested associations and groups in the financial services and retirement industry join this coalition and become part of this important effort.
ABOUT DCIIA
The Defined Contribution Institutional Investment Association (DCIIA) is a nonprofit association dedicated to enhancing the retirement security of American workers. Toward this end, DCIIA fosters a dialogue among the leaders of the defined contribution community who are passionate about improving defined contribution outcomes. DCIIA members include investment managers, consultants, law firms, record keepers, insurance companies, plan sponsors and others committed to the best interests of plan participants. For more information, visit: http://www.dciia.org.
Lew Minsky, DCIIA, http://www.dciia.org, +1 202-367-1124, [email protected]
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