U.S. Labor Secretary Hilda Solis discussed her top regulatory goals for 2010 in a Webcast on Monday, and increasing public awareness about the need for annuities stood out in her remarks. The Treasury Department has previously signaled that it was considering various options for annuitization within defined contribution retirement plans.
“Increasingly, retirees will have to live on lump sum distributions from 401(k)-type plans,” Solis said. “This increases the likelihood that they will run out of assets during their retirement years. Our goal is to reduce the chance that workers will outlive their retirement by increasing public awareness of the need for annuities, and encourage employers to offer annuities as an option.”
The Department of Labor and the Treasury Department are working together to facilitate access for companies to offer “automatic annuities” in 401(k) plans.
“I have been saying all year that, in our current financial environment, the value of a guarantee has never been greater,” said Cathy Weatherford, President and CEO of the Insured Retirement Institute (IRI). “With the dramatic declines in the financial markets, the value of guaranteed investment products has never been more apparent, helping investors achieve a financially secure retirement. The dependable, guaranteed stream of retirement income that annuities provide to people later in life is being noticed at the highest levels. We are pleased that the Obama Administration has renewed its focus on looking at annuities as a potentially pivotal piece of the retirement planning puzzle.”