Annuities and other private-market products that provide income guarantees could play a major role in improving U.S. workers’ retirement income security, life insurer representatives have told federal regulators.
The U.S. Treasury Department and the U.S. Department of Labor recently issued a joint request for ideas about how income annuities and other products that offer income guarantees could be used to improve retirement security.
Many insurers and trade groups have submitted comments.
The list of insurers that have submitted comments includes Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, New York: ING Insurance U.S., Windsor, Conn., an arm of ING Groep N.V., Amsterdam; and Nationwide Financial Services Inc., a unit of Nationwide Mutual Insurance Company, Columbus, Ohio.
TIAA-CREF President Roger Ferguson Jr. says retirement plan investment menus should include low-cost fixed annuities, and that annuities can be especially helpful to retirees with limited resources.
Workers should have access to a fixed annuity that offers a guaranteed return on investment during their working years, but they should not be required to annuitize their entire retirement savings, Ferguson writes.
Partial annuitization options can ease participant concerns about depleting savings or removing financial flexibility, Ferguson writes.
TIAA-CREF has found that about one-third of its participants choose to annuitize some portion of their assets, Ferguson writes.