ING Responds to Joint Government Agency RFI on Lifetime Income Options in Workplace Retirement Plans
ING Insurance U.S. (ING) announced today that it has filed suggestions and comments in response to the Department of Labor and the Department of Treasury (the Agencies) joint request for information on lifetime income options for participants and beneficiaries in retirement plans.
"Americans today must take responsibility not only for building their savings, but for planning to make those savings last throughout retirement," said Rob Leary, CEO of ING Insurance U.S. "ING applauds the Agencies' interest in guaranteed lifetime income and appreciates the opportunity to comment on such an important topic. We believe there is tremendous potential to increase the financial security for many individuals through guaranteed lifetime income options, especially those participating in a workplace plan."
As a leading provider of retirement products and services, both at the workplace and through financial professionals, ING's goal is to help Americans grow and protect their savings across many life stages. To that end, ING's filing reflects its keen interest in exploring new opportunities that can help Americans save more for retirement and be better prepared for their future.
"We believe a workplace plan is a cornerstone of retirement savings, yet more can be done to promote greater financial security for the millions of Americans who invest in these plans," said Catherine Smith, CEO of ING U.S. Retirement Services. "An ideal approach today not only focuses on accumulating a nest egg, but also generating a guaranteed stream of income from some portion of that savings for life, no matter how the markets perform. It also includes creating a comprehensive plan, obtaining professional advice and utilizing a number of other savings strategies, when possible."
Through its filing, ING supports a number of key positions with respect to lifetime income products, while recognizing certain items need to be addressed in order for these products to be more widely embraced by employees who save in a workplace plan. These include the following:
- Significant opportunities exist at the workplace. ING broadly supports investing in guaranteed lifetime income options within a retirement plan. Few options exist today at the plan level, so we believe much more can be done within the defined contribution framework and we strongly encourage employers to add this type of feature to their plan. Retail products, such as individual IRAs or guaranteed income annuities, are also important vehicles for consumers to plan for and manage retirement assets.
- Regulations must be simplified and clarified in order to address employer fiduciary and administrative concerns. ING believes it is essential that employers and those serving as plan fiduciaries be given the benefit of a streamlined fiduciary standard with more objective criteria than exists today under current ERISA regulations. In addition, some of the administrative burdens that come with carrying annuities need to be eased in order to attract more employers to offer these types of products.
- Greater participant communication and education is needed. In order for more Americans to embrace and understand the use of guaranteed lifetime income options, ING believes more needs to be done in terms of financial literacy and education. When individuals are participating in a workplace plan, it is often the best time - and for many, the only time - to reach them with materials, resources and communications that can increase their financial literacy and positively influence their behavior.
- Offering and investing in guaranteed lifetime income options should be encouraged for employers and employees, but not mandated. Consistent feedback received from plan sponsors and plan participants indicates a clear preference for preserving choice and control when it comes to plan design and benefit distribution matters. In light of that preference, ING favors steps that would remove barriers to adding guaranteed lifetime income distribution options as well as provide incentives for these products, but not require their use.
- A desirable strategy for many workers would include investing a portion - but not all - of one's retirement assets in a lifetime income product. Plans that offer lifetime income distribution strategies tend to present this option to employees as an "all or nothing" decision with respect to their account balance. ING favors steps that would encourage employers to make the election decision easier by encouraging individuals to complete a financial plan and then commit only an appropriate portion of their account balance to a guaranteed income stream, while retaining control of the uncommitted balance.
Joe Loparco, ING Americas, 580-580-2677 or firstname.lastname@example.org
ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in over 40 countries. With a diverse workforce of more than 110,000 people, ING is dedicated to setting the standard in helping our clients manage their financial future.
In the U.S., the ING (NYSE: ING) family of companies offers a comprehensive array of financial services to retail and institutional clients, which includes life insurance, retirement plans, mutual funds, managed accounts, alternative investments, direct banking, institutional investment management, annuities, employee benefits and financial planning. ING holds top-tier rankings in key U.S. markets and serves approximately 30 million customers across the nation. For more information, visit www.ing.com/US.