Insured Retirement Institute urges Labor Department to retain annuity safe harbor

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
AUG 01, 2025

The Insured Retirement Institute is urging the Department of Labor to reconsider its proposal to withdraw a long-standing safe harbor regulation that guides the selection of annuity providers in workplace retirement plans.

In a July 31 letter, the trade group contended that removing the rule could create uncertainty for plan fiduciaries and potentially discourage the inclusion of annuities as lifetime income options for participants.

Along with several other regulations, the DOL is aiming to eliminate a regulatory safe harbor provision established under the Pension Protection Act of 2006.

It suggested that the provision became unnecessary after Congress enacted a statutory safe harbor in 2019 as part of the SECURE Act, which streamlined certain fiduciary requirements. 

As part of a broader effort to streamline regulations under the Employee Retirement Income Security Act of 1974, the DOL's Employee Benefits Security Administration (EBSA) proposed to remove the regulatory safe harbor provision.

While the statutory safe harbor did not technically repeal or render the regulatory provision null and void, EBSA determined the statutory provision overlapped in function with the regulatory counterpart.

Consequently, it issued a direct final rule which would remove the regulatory safe harbor for annuity provider selection in individual account plans. Alongside that move, the DOL issued a call for comments on the proposal, with the consultation period ending on July 31.

In its response filed Thursday, IRI argued that the regulatory and statutory safe harbors serve distinct purposes.

"The statutory safe harbor addresses fiduciary duties related to the selection of an insurer, whereas the safe harbor in the Regulation encompasses both provider and contract selection," the IRI's letter read in part.

"Retaining the Regulation’s safe harbor will help ensure that fiduciaries have access to well-understood and time-tested guidance," the group said. "Many plan sponsors and service providers have developed internal procedures, oversight processes, and fiduciary practices based on the safe harbor framework established by the Regulation.”

The IRI – which represents life insurers, asset managers, broker dealers, and other entities involved in distributing lifetime income products – emphasized that maintaining both safe harbors gives fiduciaries flexibility to choose the compliance pathway that best fits their plan design and participant needs.

The group also warned that eliminating the regulatory safe harbor could “unintentionally lead to reluctance in offering lifetime income options, which would be contrary to the goals of the SECURE Act and SECURE 2.0 in promoting guaranteed retirement income.”

“IRI strongly supports efforts to ensure that regulatory standards are clear, consistent, and supportive of retirement income security," Emily Micale, director of federal regulatory affairs, said in a statement.

"Retaining the Regulation’s safe harbor would serve these goals and avoid unnecessary disruption to fiduciary practices that are currently working effectively.”

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