Options, Not Restrictions
It’s not surprising that annuity sales continue to set records. Fewer and fewer workers have access to traditional pensions and their predictable income streams in retirement. Savvy American savers know that annuities can provide them with guaranteed income for life, just like a pension.
Regrettably, the U.S. Department of Labor continues to try and restrict the ability of Americans to access annuities. It has introduced another fiduciary-only proposal that will limit options for consumers.
This is uncalled for and entirely unnecessary.
Since the Fifth Circuit Court vacated the DOL’s most-recent fiduciary-only proposal in 2018, robust state and federal consumer protections have been developed regarding annuity sales. For example, Wisconsin Governor Tony Evers signed legislation into law on April 15, 2022, to adopt the Best Interest revisions to the NAIC Suitability in Annuity Transactions Model.
Similar laws and regulations have been adopted by Democrat and Republican insurance commissioners, legislators, and governors in 44 other states from coast-to-coast.
These measures are aligned with the Securities and Exchange Commission’s Regulation Best Interest. More states are expected to adopt similar protections soon.
The DOL’s fiduciary-only proposal would severely undermine this progress.
It would also go against the will of Congress. In 2019 and 2022, Congress supported retirement savers with landslide bipartisan votes to pass SECURE and SECURE 2.0 legislation that made it easier for employers to include annuities in workplace retirement plans and simpler for retirement savers to utilize annuities tailored to fit their needs.
Families in Wisconsin and across the nation depend on annuities for peace of mind through retirement. More than $95 billion in annuity benefits were paid in the United States in 2022, including nearly $2.5 billion in Wisconsin alone.
A fiduciary-only proposal would make it harder for low- and middle-income savers to access annuities and the financial help and information they want and need. Moreover, it would ultimately result in a significant decline to the long-term security of savers throughout Wisconsin and the nation.
Rather than limiting options, the DOL should advance solutions that help everyone achieve financial certainty through retirement.
