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IRI Focuses on Worker Access to Retirement Savings Plans

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The Insured Retirement Institute will focus its on expanding workers’ access to retirement planning and saving opportunities in 2017, the organization noted in a conference call with reporters on Monday outlining its initiatives for the year.

IRI, a trade group for the retirement income industry, released its 2017 Retirement Security Blueprint on Monday, outlining public policy initiatives that include increasing access to lifetime income options and workplace savings plans, improving access to professional financial advice, as well as education and information, and preserving tax favorable treatment of retirement savings plans, Lee Covington, senior vice president and general counsel for IRI, said on the call.

Regarding the Department of Labor fiduciary rule, Covington noted that people who work with an advisor have better savings habits than those who try to plan for retirement on their own.

(Related: Former DOL Secretary Elected Democratic Chairman)

IRI supports a best-interest standard in financial planning, Covington said. “However, with the pending applicability date of the Department of Labor’s  fiduciary rule fast approaching, IRI continues to have significant concerns about the rule and its harmful impact on financial savers,” he said.

He continued, “The rule makes sweeping changes to the existing regulatory framework that would also make it harder for savers to plan for retirement, and it will deprive them of access to affordable holistic financial advice as well as a wide range of investment options.”  

Covington said IRI “applauds President Trump’s action earlier this month” to delay the rule. Covington said he’s confident that Labor and the Office of Management and Budget will follow the president’s directive to delay the rule until a review can be done.

IRI’s blueprint calls on Congress to replace the rule and “establish a consistent best interest standard of care that preserves access to retirement advice and offers a wide array of lifetime income products for America’s retirement savers.”

IRI also supports a bill introduced by Rep. Joe Wilson to delay the rule by two years. However, Paul Richman, vice president of government affairs, expressed concerns about the timing of the bill and whether the House Financial Services Committee would have time to mark it up before April 10. He said IRI is working with Wilson’s office to see if it can help move the bill forward.

IRI will also urge Congress to maintain tax treatment of retirement savings plans. “Our research overwhelmingly shows that people would save less if tax deferral were reduced or eliminated,” Covington said. “As our nation’s policymakers consider proposals to reform the tax code, our blueprint therefore urges to maintain the current tax treatment toward retirement savings.”

IRI is also concerned that plans to consolidate the types of retirement plans on offer could have a negative impact on savers. “Each of these retirement vehicles were created to meet the needs of different types of workers in the private, government, church, education and nonprofit sectors,” Covington said.

“Every American should be able to retire with peace of mind and enjoy their golden years after a lifetime of working,” Richman said, but that goal is “beginning to slip out of reach for too many Americans.”

He called for policymakers to make workplace retirement savings plans more available to workers. To that end, IRI is calling on Congress to pass the Retirement Enhancement and Savings Act of 2016, which was passed in the Senate Finance Committee unanimously but ultimately failed to make it to a vote on the full Senate floor, Richman said.

The bill included measures that would clarify annuity selection requirements for small-business employers; would make lifetime income benefits portable; would make it easier for employers to participate in multiple employer plans (MEPs); and would require lifetime income estimates on workers’ benefit statements, Richman said.

Kelli McMorrow, vice president of federal affairs for IRI, added that IRI also supports the Senior Safe Act of 2017, which would protect financial institutions and advisors from liability when they report suspicions about financial elder abuse.

McMorrow noted that the average loss per incident of financial exploitation is estimated to be about $120,000, which is also the average amount of retirement savings for people 50 and older.  

“Financial elder abuse can erase a lifetime of savings,” she said.

— Read Elder Financial Abuse Appears to Be Worse Than Thought: Allianz Life Study on ThinkAdvisor. 


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