Posted on March 5, 2019

Sustainable Strategies Aimed at Helping Americans Achieve
Secure, Dignified Retirement

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) announced today its 2019 federal and state policy blueprints to advance retirement security policies for all Americans.

IRI, the leading trade association for the retirement income industry, says its policy objectives are constructed “on the pillars of expanding opportunities to save, increasing access to lifetime income in retirement, helping savers make decisions about their finances for their retirement and increasing consumer protections to safeguard against financial exploitation and abuse.”

"The Blueprints are our guide to engage in a dialogue with federal and state public policy makers about what can be done to help provide sustainable strategies to address the challenges Americans face to achieve a secure and dignified retirement,” said Wayne Chopus, IRI president and CEO.

IRI’s Federal Blueprint Legislative Highlights

This year’s Blueprint includes several measures which were included in the comprehensive retirement security bill Congress had considered last year and again will consider this year – the Retirement Enhancement and Savings Act (RESA) (H.R. 1007).

Specially, the RESA measures included in the Federal Blueprint are:

  • ▪Eliminate regulatory and legal barriers to facilitate small businesses ability to offer workplace retirement plans -- Open Multiple Employer Plans (MEPs).
  • ▪Remove the 10% cap on automatic increases to employee contributions.
  • ▪Increasr the start-up retirement plans maximum tax credit for small employers
  • ▪Clarify the annuity selection safe-harbor rule to allow employers to select annuity products provided by insurers that meet certain existing regulatory requirements.
  • ▪Prevent employees from losing lifetime income benefits by allowing annuity portability without making it a distributable/taxable event
  • ▪Requiring illustrations on annual benefit statements of estimated monthly retirement income that workers could receive from their accumulated account balance

In addition to RESA, IRI’s 2019 Federal Retirement Security Blueprint also includes:

  • ▪Requiring all but the smallest employers to maintain a retirement savings plan in which employees would be automatically enrolled (with the ability to opt out).
  • ▪Updating the required minimum distribution (RMD) rules to reflect longer lifespans
  • ▪Authorizing electronic delivery to be the default option for providing required disclosures to plan participants, with an option to receive paper if desired preserved.
  • ▪Allow employers who voluntarily want to make matching contributions to help employees with student loan payments to receive employer matching contributions into their retirement plan as if those student loan payments were salary reduction contributions made to the retirement plan while they continue to make their student loan payments.
  • ▪Extend retirement savings counseling to federal student loan, job training and apprenticeship program recipients.
  • ▪Increase protections to safeguard consumers personal financial information by enacting a uniform standard to be implemented in the states.
  • ▪Prohibit the private collection of tax debt of any individual over the age of 65 to prevent older Americans from becoming victims of a well-known scam.

Federal Blueprint Regulatory Highlights

Best Interest Standard – IRI has long supported the principle that financial professionals should be required to act in their clients’ best interest when providing personalized financial recommendations.  IRI believes the U.S. Securities and Exchange Commission’s proposed Regulation Best Interest  will help investors make informed decisions about the type of financial professional that would best meet their needs while preserving investors’ choice and access to the products and services they need to achieve their financial goals.

Summary Prospectus -- IRI has been working with the Securities and Exchange Commission (SEC) to  create a more rational, useful, consumer-friendly disclosure of essential information about variable annuity and variable life insurance contracts. Last year, the SEC proposed a rule and form amendments, “Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts,” which would accomplish this objective. IRI expects a final rule to be announced this year.

IRI’s State Blueprint Highlights

  • State policymakers should continue to engage with their federal (SEC and DOL) counterparts to develop a consistent and workable standard of conduct that will provide meaningful and effective consumer protections without depriving savers of access to products and services.
  • State-run Adult Protective Services (APS) are woefully underfunded and understaffed, leaving them without the resources to fully investigate suspected abuse and exploitation. IRI calls on the states to increase the amounts appropriated to APS agencies to ensure they are sufficiently able to investigate and prosecute abuse and fraudulent activities.
  • While we believe the states can and should play an important role in addressing retirement security, the creation of state-run retirement plans is the wrong approach. Instead, the states should focus on education and awareness about the importance of retirement planning and encourage federal policymakers to enact proposals expanding access to private-sector retirement plans.
  • With increasing use of technology solutions and a parallel rise in data breaches, IRI calls on the states to adopt consistent standards for data security which protects consumers and minimizes cost to the industry and the economy.
  • The laws and regulations currently barring the use of technological solutions should be modernized to improve the consumer experience while maintaining consumer protections.

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Contact: Dan Zielinski