Labor chief wants to add annuities to 401(k) mix

Encouraging employers to offer annuities in pension plans will be one of the Labor Department's top regulatory goals in 2010.

Encouraging employers to offer annuities in pension plans will be one of the Labor Department’s top regulatory goals in 2010.

Labor Secretary Hilda Solis, speaking in a video webcast this morning, listed enhanced retirement security as one of the key areas that her agency will address in new regulations next year.

“Increasingly, retirees will have to live on lump sum distributions from 401(k)-type plans,” Ms. Solis said. “This increases the likelihood that they will run out of assets during their retirement years. Our goal is to reduce the chance that workers will outlive their retirement by increasing public awareness of the need for annuities, and encourage employers to offer annuities as an option.”

Ms. Solis said that her agency is working with the Treasury Department “to determine how best to enhance the retirement security by facilitating access to a lifetime stream of income at retirement.”

The two departments plan to take steps to make it easier for companies to offer “automatic annuities” in 401(k) plans, J. Mark Iwry, senior adviser to Treasury Secretary Timothy Geithner, said in September.