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IRI Advocates for Provisions of RESA in Federal Retirement Security Blueprint
In addition, in a new 2019 State Retirement Security Blueprint, the Insured Retirement Institute (IRI) says the creation of state-run retirement plans is the wrong approach to addressing retirement security for all Americans.
The Insured Retirement Institute (IRI) has released its 2019 Federal Retirement Security Blueprint, and this year, has added a State Retirement Security Blueprint, detailing its advocacy efforts.
In a media briefing, Paul Richman, chief government and political affairs officer with IRI, said it is seeing “some significant steps by Congress to achieve our specific goals. Financial security is one of the top four goals for Congress this year.”
He noted that the recently reintroduced Retirement Enhancement and Savings Act (RESA) contains a combination of measures in the IRI Federal Blueprint.
Specially, the RESA measures included in the Federal Blueprint are:
- Eliminate regulatory and legal barriers to facilitate small businesses ability to offer workplace retirement plans—open multiple employer plans (MEPs);
- Remove the 10% cap on automatic increases to employee contributions;
- Increase the start-up retirement plans maximum tax credit for small employers;
- Clarify the annuity selection safe-harbor rule to allow employers to select annuity products provided by insurers that meet certain existing regulatory requirements;
- Prevent employees from losing lifetime income benefits by allowing annuity portability without making it a distributable/taxable event; and
- Requiring illustrations on annual benefit statements of estimated monthly retirement income that workers could receive from their accumulated account balance.
Richman also told media that the IRI supports provisions in the Automatic Retirement Plan Act, including requiring all but the smallest employers to maintain a retirement savings plan in which employees would be automatically enrolled (with the ability to opt out) and removing cumbersome regulatory barriers to small employers adopting retirement plans for employees.
The IRI has also sent a letter of support for the annuity safe harbor bill that was reintroduced in the House last week.
A new initiative in the Federal Blueprint is to allow employers who voluntarily want to make matching contributions to help employees with student loan debt save for retirement contribute employer matching contributions into their retirement plan as if those student loan payments were salary reduction contributions made to the plan. The Blueprint also calls for an update of the required minimum distribution (RMD) rules to reflect longer lifespans and individuals’ desire to work longer.
Jason Berkowitz, chief legal and regulatory affairs officer with IRI, told attendees of the media call that the IRI is continuing to advocate for a harmonized best interest standard for investment professionals providing investment advice. “We believe codifying best interest standards will assure consumers and encourage them to reach out for advice,” he said. He also stated that IRI believes the Securities and Exchange Commission (SEC) and the National Association of Insurance Commissioners (NAIC) are in the best position to promote best interest standards.
According to Berkowitz, the IRI will work closely with state legislators and regulators as it believes states introducing their own fiduciary rules will create a patchwork of regulations that will be hard to follow and confuse individuals. “IRI encourages states not to take this approach,” he said.
In addition, the IRI has been working with the SEC to create a more rational, useful, consumer-friendly disclosure of essential information about variable annuity and variable life insurance contracts. Last year, the SEC proposed a rule and form amendments, “Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts,” which would accomplish this objective. IRI expects a final rule to be announced this year.
In the State Retirement Security Blueprint, the IRI says it will work on preserving workplace retirement plans. Berkowitz says the IRS does not believe state-run plans are not the answer, instead it believes states should focus on educating individuals about the importance of retirement planning and encourage federal policymakers to enact proposals expanding access to private-sector retirement plans.
Also in the State Blueprint, the IRI calls on states to adopt consistent standards for data security which protects consumers and minimizes cost to the industry and the economy.You Might Also Like:
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