401k Specialist ran the following article in which several industry experts, including NAFA’s president and CEO Chuck DiVencenzo, weigh in on the SECURE Act and the impact it stands to make on annuities and consumer retirement.
November 26, 2019
Plan sponsors have long shied away from including annuities in their 401k plans due to concerns over getting sued. If the SECURE Act and its safe harbor provision becomes law and removes that concern, annuity providers are poised to jump into the retirement plan market with both feet
Annuities in 401k plans?
Not a common occurrence to date. The “last mile,” some call it.
In fact, while companies already can offer annuities in their 401k lineups, just 9% do, according to the Plan Sponsor Council of America.
The primary reason holding plan sponsors back—fear of legal liability if the annuity provider fails or otherwise fails to deliver—could very well be gone if the latest retirement reform legislation becomes law.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act stuck in the Senate as of press time (but quite possibly tacked on to a must-pass appropriations bill in the interim) contains a key provision that removes that liability fear from plan sponsors. It could kick open the door to a 401k-plan market long coveted by life insurance companies that provide annuity products.