Trump Executive Order Leaves Life Insurers Hungry for More

The Executive Order

In the new executive order, which was issued Friday, Trump calls for:

• The U.S. Treasury Department and the U.S. Labor Department to make it easier for small businesses to join together to offer “multiple employer plans,” or MEPs.
• The Treasury and Labor departments to ease retirement plan recordkeeping and notice requirements.
• Treasury officials to update required minimum distribution rules.

S. 2526

S. 2526 was introduced by Sens. Orrin Hatch, R-Utah, and Ron Wyden, D-Ore., in March.

The bill, which is a similar to a bill that received unanimous approval from the Senate Finance Committee in September 2016, includes provisions that could:

• Clear statutory obstacles to employers participating in MEPs.
• Require a retirement plan statement to include an illustration showing the participant what kind of guaranteed lifetime retirement income payments the participant’s account could produce.
• Create a fiduciary safe harbor for a plan sponsor that chooses a guaranteed lifetime retirement income contract provider.

Some life insurers have argued that a fiduciary safe harbor could lead to a dramatic increase in the number of sponsors of 401(k) plans and similar plans that offer a savings annuitization option within the plan.

More information about the bill, including a link to the text, is available here.

— Read Senators Reintroduce Retirement Enhancement and Savings Act, on ThinkAdvisor.

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