Congress Supports Lifetime Income
Retirement security public policy has historically been a bipartisan endeavor. The most impactful reforms have come from across-the-aisle collaboration aimed at expanding access to retirement savings plans and increasing Americans’ retirement savings. From the Pension Protection Act in 2006 to the Setting Every Community Up for Retirement Security (SECURE) Act of 2019, Congress has demonstrated that a large package of smart bipartisan proposals is the way to move the retirement needle.
While the provisions of these bills have varied, one common theme in prior legislation has been the continued encouragement and support of lifetime income products. Annuities, the only product that guarantees income for life, are like traditional pension plans. They insure retirees against the risk of outliving their savings and ensure they can draw down their savings throughout retirement.
The SECURE Act in particular, has allowed employers to more easily offer an in-plan annuity option to employees. This gives workers more flexibility when investing their savings and offers a layer of protection in the retirement years. SECURE also provides an important financial literacy tool – an illustration that would help savers understand their savings balance and assist them in making better financial planning decisions.
The next step in retirement security policy currently moving through both the House and the Senate also leverages the power of annuities. In early March, House Ways and Means Chairman Richie Neal (D-Mass.) and Ranking Member Kevin Brady (R-Texas) successfully passed the Securing a Strong Retirement Act of 2021 out of the Committee. Their Senate colleagues, Senators Ben Cardin (D-Md.) and Rob Portman (R-Ohio), introduced the Retirement Security & Savings Act in May.
Both legislative packages remove barriers to make annuities more available, improve the rules surrounding qualified longevity annuity contracts, and ensure spousal survival rights are protected.
Numerous other bills are also pending in the House and Senate, signaling Congress’ ongoing commitment to ensuring that Americans can and do save for retirement and importantly, have access to lifetime income tools.
(To learn more about annuities, join ACLI’s Twitter chat on Monday, June 28 from 1-2 p.m. ET. #SecureRetirement2021)