Treasury, Labor Get Earful About Annuities

ING Insurance U.S. says employers should be encouraged to add guaranteed lifetime income options to retirement plan investment option menus.

Guarantees also could be offered through individual retirement accounts and guaranteed income annuities at the individual level, according to ING Insurance.

“Regulations must be simplified and clarified in order to address employer fiduciary and administrative concerns,” and “Greater participant communication and education is needed,” ING Insurance says.

Like TIAA-CREF, ING Insurance is supporting the idea of offering voluntary partial annuitization options, rather than imposing annuitization mandates, or requiring retirees who annuitize any assets to annuitize all assets.

In general, “offering and investing in guaranteed lifetime income options should be encouraged for employers and employees, but not mandated,” ING Insurance says, noting that plan sponsors and plan participants say participants want control over distribution.

Nationwide Financial says recent market conditions have clearly demonstrated the value of income guarantees.

Nationwide Financial has come up with the 401KIncome proposal, which would provide an incentive for employers with defined contribution plans to use the employer match to buy fixed income deferred annuities.

“Employees would still have control over and access to their own contributions, but the employer match would not be accessible for loans or early withdrawals,” Nationwide Financial says. “Employees could also choose to put their own deferrals in the defined benefit option.”