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Legislation

Lawmakers introduce bill to clarify rules on lifetime income products in DC plans

Plan sponsors would have more certainty about providing guaranteed lifetime income products within their defined contribution plans under legislation introduced Friday by Rep. Tim Walberg, R-Mich., and Rep. Lisa Blunt Rochester, D-Del.

The bill would clarify Department of Labor rules and offer specific guidelines for employers who want to include annuities on their retirement plan menus.

Current DOL regulations intended to give a safe harbor have not addressed sponsors' concerns of possible fiduciary liability when a defined contribution plan offers an annuity as a distribution option.

"This bill would create what I think of as a true safe harbor. While no employer would be required to offer a lifetime income distribution option, this bill would provide a straightforward process to ensure that the plan sponsor's fiduciary obligations are satisfied," said Michael Hadley, partner at law firm Davis & Harman.