LIMRA announced Thursday it has provided information and industry data to the U.S. Treasury Department and Labor Department as part of a response to a request for information (RFI). The organization hopes to assist the federal government as it examines the role that guaranteed lifetime income options can play in workplace retirement plans.
On Feb. 1, the departments of Treasury and Labor issued the RFI seeking input on ways to help retirees meet a growing challenge: how to convert savings from 401(k) plans or similar plans into a guaranteed stream of lifetime income.
“LIMRA has 94 years of comprehensive, independent and objective research that can provide the facts policymakers need as they determine how to promote retirement security for American workers,” said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global, in a statement released on May 6. “With 3 million Americans retiring this year and even more in each of the coming years–it is important that any decisions our government makes are informed ones.”
Summary of LIMRA’s findings:
- More than 80 percent of consumers consider having a lifetime income stream as very important of which two-thirds think it’s critical. Yet only 20 percent planned to use annuities as a source for retirement income.
- Many consumers are not aware of all their retirement income options in their current retirement plan and therefore make decisions based on incomplete facts.
- Only 30 percent of plan sponsors offer lifetime income education to help consumer understand their choices. Without this knowledge and understanding, these flawed decisions are critical factors that prevent Americans to effectively plan for retirement.