The Senate Finance Committee unanimously approved legislation Wednesday that would make it easier for retirement plan sponsors to add annuities to their programs.
The bill would provide safe harbor from lawsuits for plan sponsors that choose an annuity provider overseen by state regulators. The measure also would allow plan participants to roll over lifetime income investments into individual retirement accounts, if the sponsor decides not to continue to offer the option.
(More: Government Accountability Office pushes DOL to update 401(k) annuity rules)
The bill, the
Retirement Enhancement and Savings Act, would make several other changes to 401(k) and IRA administration, including requiring defined-contribution plans to make lifetime income disclosures annually.
It also is designed to expand retirement coverage by allowing small employers in unrelated industries to combine to offer retirement plans to their workers.
“What we're doing with this legislation is beginning to modernize retirement policy in this country,” Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee, said during the panel's deliberations.
The committee chairman, Sen. Orrin Hatch, R-Utah, said, “It will increase the portability of retirement plans and the reliability of lifetime income by making it easier for employers to offer annuity contracts — a form of life insurance — as part of their employee retirement benefits.”
(More: DOL fiduciary rule could cause half of potential IRA rollover assets to stay put: report)
The bipartisan comity was hailed by an industry participant.
“This is what a normal [legislative] process looks like, and it was on a retirement-savings bill,” said Jamie Kalamarides, senior vice president and head of full service solutions for Prudential Retirement. “It's exciting to reach this important milestone in the Senate.”
The panel moved the bill to the Senate floor along with a measure that would strengthen pensions for coal miners.
The two are expected to move together and potentially be attached to a year-end spending bill. Political support for the miner pension legislation could help propel the retirement-savings bill in both the Senate and House.
