Department of Labor/Department of the Treasury Request for Information Regarding Lifetime Income Options for Retirement Plans

In February 2010, the Department of Labor and Department of the Treasury requested comments on whether and how the Agencies should use their rulemaking authority to facilitate access to lifetime income options in defined contribution retirement plans and IRAs.

On May 3, 2010, CFP Board filed a comment letter with the Agencies, sharing that there is no consensus in the financial planning community over the use of annuities in retirement planning. The letter shared results from CFP Board’s recent survey of CFP® professionals, which found that while approximately 71% of respondents at least occasionally recommend commercial annuities when helping people plan for retirement, more than 90% did not believe retirement plan participants or IRA owners should be defaulted into annuities if they do not opt out of annuitization. In its comment letter, CFP Board cited this lack of consensus as reason to oppose proposals to require mandatory or default annuitization, expressing skepticism of proposals to require annuities as plan options. CFP Board urged the Agencies, to the extent they seek to establish requiring annuities as plan options, to use their authority to provide more comprehensive rules regarding the use of annuities in defined contribution plans and IRAs, while being careful to preserve important participant protections, including fiduciary oversight in employer-maintained plans.

CFP Board also expressed strong support for efforts to educate all Americans about the need to plan for retirement, noting that greater transparency and disclosure in annuity pricing and fees would be helpful.