Protection and Choices for Retirement Savers

Every day, 10,000 Americans turn 65 years old. Those celebrants undoubtedly have as many different ideas about their retirement planning as they have birthday candles.

Retirement planning needs vary. Fortunately, regulators and lawmakers are recognizing that. Case in point: the U.S. Department of Labor (DOL) has moved in the right direction toward a harmonized approach to new consumer protections for retirement guidance. An approach that also safeguards access to vital choices for lower- and middle-income savers.

Ultimately, the DOL should align its guidance with the U.S. Securities and Exchange Commission’s Best Interest regulatory package and the best interest enhancements to the National Association of Insurance Commissioners’ (NAIC) Suitability in Annuity Transactions Model Regulation.

The SEC rule and NAIC model require financial professionals to act in the best interest of consumers when providing guidance and information regarding all forms of retirement savings products.

This approach will maintain access to choices in retirement products such as annuities – the only product in the marketplace that guarantees lifetime income.

The SEC’s Regulation Best Interest took effect in June. And states are advancing their own best interest proposals. Iowa and Arizona have already adopted the NAIC model regulation, and the American Council of Life Insurers is working to have all states adopt these protections.

Life insurers strongly support federal and state best interest initiatives for consumers. They are a vast improvement over a 2016 DOL fiduciary-only rule that was struck down in federal court. That approach unfairly restricted access to information for the average saver.

The average annuity owner’s income is $64,000. Consumers need choices, not constraints, in their retirement planning, especially with the economic upheaval caused the COVID-19 pandemic. Consumers also need to feel confident that they can trust guidance received from their financial professional.

Robust actions by the SEC and NAIC justify that confidence. The DOL can do its part to help to ensure its rules for fiduciaries harmonize with these best interest rules for all financial professionals to enhance protections and give consumers nationwide access to information and choices for retirement savings, including guaranteed lifetime income.

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Susan Neely

Susan Neely

Susan K. Neely is the President and CEO of the American Council of Life Insurers (ACLI), the nation's leading trade association dedicated to providing products and services that contribute to Americans' financial and retirement security. As president and CEO, Neely drives public policy and advocacy on behalf of ACLI's member companies that represent 94 percent of industry assets and serve 90 million families.

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