Senate Special Committee on Aging Holds Hearing on Lifetime Income Options

June 23, 2010

The Senate Special Committee on Aging held a hearing on June 16, 2010 to discuss ways to help retirees convert their savings into retirement income for the rest of their lives. Committee members paid particular attention to testimony on how to educate individuals on retirement planning and flexible lifetime income solutions, particularly annuity products.

Committee Chairman Herb Kohl (D-WI) led the hearing, called “The Retirement Challenge: Making Savings Last a Lifetime,” with questions on a number of topics related to lifetime income. Senators Susan Collins (R-ME) and Al Franken (D-MN) also attended.

Panelist Phyllis Borzi, the Assistant Secretary of the Employee Benefits Security Administration at the Department of Labor, provided testimony focused on the comments the DOL and Treasury received in response to their Request for Information (RFI) regarding lifetime income options for participants and beneficiaries. She announced that the DOL intends to hold a public hearing to build on the RFI dialogue, and that details of the hearing will be announced soon.

Mark Iwry, the Senior Advisor to the Secretary of the Treasury and the Deputy Assistant Secretary for Retirement and Health Policy, noted that the Treasury does not intend to require or mandate an income solution, but will instead focus on guidance that helps foster options and education.

Sen. Kohl did not discuss any specific course of future action as he adjourned the hearing. However, he has sent a letter to the Government Accounting Office requesting a review of how current regulatory structures ensure that institutions that sell annuities will be able to meet their future financial commitments, and a review of the state guarantee funds that protect purchasers of annuities.

His opening statement, the statements of the witnesses, and several statements submitted for the record can be found on the Senate Special Committee’s Web site. We will continue to report on significant future developments.