The Department of Treasury and Department of Labor are teaming up to help the nation’s retired seniors economic security through granting access to more retirement planning options and information on investments. Specifically, the DOL is acting to make 401(k) plan providers make the nature and costs of their services more transparent.
The Department of Treasury and IRS are moving to ease regulations in the annuities market and other sources of “lifetime” income such as pensions. The actions are motivated by a substantial decrease in the use of such lifetime income streams to fund a retirement plan.
The actions proposed by the Department of Treasure seek to remove several barriers reducing the availability of lifetime income options. These actions include: making it easier to give retirees the option to use a small share of their plan benefit as a portion of their regular income for life, then receiving the remainder as a lump-sum payment; helping retirement plans and IRAs to allow retired employees, aged at least 80 years, to set aside a small portion of their plan balance to “lifelong retirement income” so that extra-long lived individuals will not run out of income; and clarifying how the 401(k) spousal protection rules apply to deferred annuities. As a slap to retirement plan sponsors who disclose too little information on investment fees, new steps are proposed to be taken to make these fees more transparent in order to make direct plan comparison more simple and potentially lowering overall fees charged by plan sponsors.