ACLI Releases Facts About the Secure Act's Annuity Safe Harbor Provision

WASHINGTON, Aug. 2 -- The American Council of Life Insurers issued the following news release:

The American Council of Life Insurers (ACLI) released the following facts today in response to a Brookings Institute report on the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

The SECURE Act, now before the U.S. Senate, would help millions of Americans who are struggling to prepare for retirements that could last 20 years or longer. A key provision would make it easier for employers to offer annuities in their retirement plans. Annuities provide a guarantee of lifetime income like a traditional pension. SECURE aims to encourage employers to consider offering annuities that meet the long-term needs of their workforce.

A recent Brookings Institute report makes inaccurate assertions about this provision. Here are the facts:

The SECURE Act logically permits employers to rely on the expertise of the state insurance departments to ensure that life insurers can make every annuity payment not only today but in the future. No rating agency has as much information as state insurance regulators on an insurer's ability to pay future benefits.

The report failed to recognize the robust, uniform solvency rules in place today. State insurance regulators actively supervise and enforce these rules on life insurers to protect retirees and the monthly annuity income payments they are owed.

Under the SECURE Act, employers are eligible for safe harbor relief only if they select a life insurer that can certify it is in good standing under state solvency rules.

The SECURE Act does not change the fact that employers must weigh the overall benefits and costs associated with annuities they choose to offer in their retirement plans.

"Helping people turn their savings into a guaranteed lifetime stream of income is one of the SECURE Act's many important retirement enhancements," said ACLI Vice President, Taxes & Retirement Security James Szostek. "It also will get more than 700,000 Americans who work for small businesses to save. The U.S. Senate must not miss its historic opportunity to address Americans' retirement security challenges."

The American Council of Life Insurers (ACLI) advocates on behalf of 280 member companies dedicated to providing products and services that promote consumers' financial and retirement security. 90 million American families depend on our members for life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, dental and vision and other supplemental benefits. ACLI represents member companies in state, federal and international forums for public policy that supports the industry marketplace and the families that rely on life insurers' products for peace of mind. ACLI members represent 95 percent of industry assets in the United States.