US - The US Department of Labor (DOL) and the Treasury are requesting feedback on the implications of integrating a lifetime annuity arrangement into defined contribution plans.
The DOL and Treasury yesterday issued a request for information (RFI) asking for comments from industry participants about how to improve retirement security through lifetime annuities, or other benefits that provide income through a participant's lifetime.
The agencies said they were reviewing the Retirement Income Security Act and tax codes to determine if annuities should become part of defined contribution plans.
The inquiry comes as an increasing number of 401(k) plans and defined benefit plans are offering lump-sum payouts on retirement.
The RFI said: "In recognition of the foregoing, the Agencies are considering whether it would be appropriate for them to take future steps to facilitate access to, and use of, lifetime income or other arrangements designed to provide a stream of income after retirement."
DOL Employees Benefits Security Administration assistant secretary Phyllis Borzi said: "Today's initiative is particularly important given the shift from defined benefit plans that offer employees lifetime annuities to 401(k) and other defined contribution plans that typically distribute retirement savings in a lump sum payment."
The deadline for submissions is May 3.
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