American Council of Life Insurers: Labor Department's Proposed Fiduciary-Only Regulation Hinders Progress on Americans' Retirement Security

WASHINGTON, Jan. 11 -- The American Council of Life Insurers issued the following news release:

The proposed fiduciary regulatory package from the Department of Labor threatens to undermine progress on Americans' retirement security and should be withdrawn, American Council of Life Insurers (ACLI) President and CEO Susan Neely testified today in a congressional hearing.

"Thank you for your commitment and bipartisan work to increase Americans' access to retirement security under SECURE and SECURE 2.0," Ms. Neely said in testimony before the House Financial Services Capital Markets Subcommittee. "As a result, Americans will have more lifetime income options to ensure that they do not run out of income in their retirement.

"We want this progress to continue. We are concerned that the DOL fiduciary rule hurts this progress, especially given Americans' urgent need for financial certainty in retirement."

Ms. Neely stressed that the proposal is coming at the wrong time for retirement savers. A record number of Americans will turn 65 this year. Over 4.1 million Americans will turn 65 each year through 2027, with more than 11,200 Americans retiring every day.

"While Congress and the President are advancing policies to help close the retirement savings gap, DOL's fiduciary rule threatens to do the opposite. Expanding the definition of an investment advice fiduciary will hurt those who need retirement security most by creating a barrier between low- and moderate- income savers and financial professionals," she testified.

"Before the Fifth Circuit vacated the 2016 rule, the response to the fiduciary-only regulation resulted in more than 10 million American workers' accounts, with $900 billion in savings, losing access to professional financial guidance, according to a 2018 Deloitte study.

"Life insurers have opposed the DOL's efforts to expand the definition of fiduciary, NOT because it would preserve a so-called profitable status quo as some critics assert. But because it is unnecessary -- ignoring substantive consumer protections that have been implemented in the last 3 years -- and would ice-out Americans who rely on financial professionals and access to retirement security products.

"For these reasons, the DOL fiduciary proposal should be completely withdrawn," Ms. Neely concluded.

Ms. Neely's submitted written testimony to the subcommittee is available here (https://www.acli.com/-/media/public/pdf/leadership-initiatives/consumer-protection/writtenstatement_hfs_capitalmarkets_final_jan2024.pdf).

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The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI's member companies are dedicated to protecting consumers' financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI's 275 member companies represent 93 percent of industry assets in the United States.

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Original text here: https://www.acli.com/posting/nr24-003