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.