WASHINGTON BUREAU – Insurer representatives say the U.S. Treasury Department and the U.S. Labor Department could encourage use of lifetime income options by updating the rules governing educational materials.
The witnesses testified here today on the second day of a 2-day hearing organized by Treasury Department and Labor Department officials. The departments are looking into the idea of helping defined contribution retirement plan participants buy lifetime income products. Employer representatives spent much of the first day talking about the need to protect plan sponsors and managers against fiduciary liability if there turn out to be problems with annuity provider selections.
The insurer representatives also talked about fiduciary liability.
For plan sponsors, potential exposure to fiduciary liability under Section 404 of the Employee Retirement Income Security Act (ERISA) is of paramount concern, according to Patricia Harris, an assistant vice president at Hartford Financial Services Group Inc., Hartford, who testified on behalf of the Insured Retirement Institute, Washington.
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“A violation of ERISA’s fiduciary duties potentially results in personal liability for plan sponsors,” Harris said.
Thomas Roberts, a witness who represented the American Council of Life Insurers (ACLI), Washington, said the Labor Department could help give employers the tools needed to give employees more guaranteed lifetime retirement income options, and better information about the options.