The Insured Retirement Institute recently came out with its 2018 Retirement Security Blueprint document.
The group will use the document as a framework for efforts to shape retirement security policy when it’s working with members of Congress, and with representatives from the Trump administration.
Many provisions in the report relate mainly efforts to build annuitization options and other income security features into employer-sponsored retirement plans. Those could affect agents and brokers in the individual annuity market by changing clients’ overall financial picture.
Other provisions in the blueprint document could have a direct impact on individual annuity producers’ daily lives.
Many of the types of proposals IRI has offered appeal to some Democrats in Congress as well as to Republicans, and lawmakers may see working on IRI’s priorities as a way to break the gridlock ice and operate in a more bipartisan fashion.
A complete version of the blueprint document is available here.
Here’s a look at five of the 2018 IRI advocacy priorities of particular interest to individual annuity producers.
1. Adopting a variable annuity summary prospectus
Annuity producers now have to provide a full prospectus that looks like an old-fashioned telephone book, to clients who, in some cases, may have only dim memories of telephone books. About 60% of consumers say they would be more likely to talk to advisors about variable annuities if they had access to a summary prospectus.
2. Reducing the minimum retirement plan in-service rollover age.
Active participants in 401(k) plans and similar plans now need to wait until they turn 59 1/2 to roll assets into annuities. IRI would like to see Congress lower the minimum in-service rollover age to 50.
3. Changing the tax rules for income from annuities and other arrangements that offer guaranteed lifetime income.
IRI would like to see Congress create a special tax rate, or an exclusion, for annuity distributions and withdrawals.
4. Changing the rules governing use of qualifying longevity annuity contracts (QLACs).
The holder of an individual retirement account, or a participant in an employer-sponsored retirement plan, can use only 25% of the account balance, or $125,000, whichever is less, to pay for the longevity protection that a QLAC provides. IRI would like to see Congress eliminate that limit.
5. Setting up a National Insurance Licensing Clearinghouse.
The idea of providing national agent licensing has been circulating in Congress since the days when Theodore Roosevelt was young. The National Association of Registered Agents and Brokers Reform Act, or NARAB II, could create one-stop federal licensing but has not yet been implemented. IRI would like to see President Donald Trump appoint a NARAB board and get the licensing clearinghouse up and running as soon as possible.
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