U.S. Chamber Responds to Administration's Request for Information on Retirement Security

WASHINGTON, D.C.—The U.S. Chamber of Commerce today sent a letter to the Department of Labor in response to the request for information from the Administration regarding lifetime income options in retirement plans. The request solicits information from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public.

"Our members would like to see greater education surrounding lifetime income options and incentives for offering and taking lifetime income options," said Randel K. Johnson, senior vice president of Labor, Immigration, and Employee Benefits at the U.S. Chamber. "Nonetheless, we do not believe mandates will be effective or helpful. In addition, many plan sponsors are concerned about increased liabilities that would result from mandates.

"We encourage the Labor and Treasury departments to provide greater incentives for lifetime income options without burdening plan sponsors with unnecessary mandates by providing clear safe harbors and related guidance," Johnson continued.

Until recently, retirement planning focused on wealth accumulation. However, as more people are living longer in retirement, there is increased attention on deciding how such wealth should be managed to provide a steady stream of income for the duration of the retirement period. Due to concern about people outliving their retirement savings, there has been more attention given to distribution options from retirement plans and wealth management during the retirement period.

The letter details the Chamber's top priorities surrounding lifetime income products. First, the letter explains the importance of defined contribution plans in the current retirement landscape and urges the agencies to not underestimate the security that they provide in their current form to millions of participants. The letter then details a number of issues including low take-up rates among participants, concerns about increased liabilities on employers, incentives for employers to provide information on lifetime income products, and suggested changes to the minimum required distribution rules. Moreover, the letter urges the agencies against requiring lifetime income products as a mandated distribution option in defined contribution plans.

"As plan sponsors and service providers, we have a strong interest in promoting all aspects of retirement security," Johnson stated. "We believe that changes can be made to the system without unduly burdening any party yet still maintaining needed flexibility. We look forward to working with both the DOL and Treasury and other interested parties in addressing the concerns we have raised on this important endeavor."

A copy of the full letter is available here: /assets/uscc/LifetimeIncomeOptions-ResponsetoRFI.pdf

The U.S. Chamber of Commerce is the world's largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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