Lawmakers introduced two bipartisan bills this week that for the first time would allow employers to offer annuities in retirement plans and greenlight the electronic delivery of employee retirement statements.

Reps. Tim Walberg, R-Mich., and Lisa Blunt Rochester, D-Del., introduced H.R. 4604, the ”Increasing Access to a Secure Retirement Act,” while Reps. Phil Roe, R-Tenn. and Jared Polis, D-Colo., reintroduced H.R. 4610, the “Receiving Electronic Statements to Improve Retiree Earnings Act,” or “RETIRE Act.”

The “Increasing Access to a Secure Retirement Act” enables businesses to use annuities in employer-sponsored retirement plans. The legislation provides employers with a streamlined path for meeting their fiduciary obligations under ERISA, a move supporters hope will encourage more employers to offer guaranteed lifetime-income products inside retirement plans.

“The bipartisan bill would go a long way toward boosting Americans’ financial security in retirement by offering greater access to annuities, the only private-sector product guaranteeing lifetime income," American Council of Life Insurer President and CEO Dirk Kempthorne said. “The bill would amend a regulation that, due to its lack of clarity, discourages employers from offering annuities in retirement plans.”

Today, before an employer can offer an annuity option, the plan fiduciary must first determine whether “an annuity provider is financially able to make all future payments under an annuity contract.”  This standard is difficult for employers—especially smaller employers—to meet, in part because of the cost and complexity associatied with this type of  due diligence, Kempthorne said.

The bill would ease that burden by allowing employers to rely on state insurance department reviews of the financial strength of an insurer and the insurer’s ability to meet its commitments.

“By providing clear and more certain rules for the selection of an annuity provider, employers will be much more willing to offer annuities in their retirement savings plans,” “Kempthorne said.

“With employer-based retirement savings plans playing a vital role in helping workers achieve retirement security, this legislation is absolutely necessary,” the ACLI president added.

James Barnash, an investment advisor with SGL Financial in Buffalo Grove, Ill., told Financial Advisor that greenlighting annuities in retirement plans “is interesting because there are a lot of people who do need to have that guaranteed piece in their retirement plan.”

Barnash, a former president of the Financial Planning Association, said it will be critical that both advisors and retirement investors are educated to understand “all the bells and whistles in these products” and to keep a handle on costs, which can go as high as 5 percent for some annuities.

On the cost-savings front, the “RETIRE Act”  would for the first-time allow employers offering retirement plans to use electronic delivery of required disclosures and reports such as employee statements as a default. As a precaution, the bill also mandates that participants have the opportunity to opt to receive communications in paper format.

“We need to make it easier for Americans to think about and plan for retirement,” Polis said in a statement. “Nowadays, most Americans prefer their inbox to their mailbox. The RETIRE Act makes planning one click away by giving employees online access to their retirement information. Not only does it make retirement information more accessible, but it helps the environment and reduces costs by cutting back on wasted paper.”

Allowing electronic delivery and the significant cost savings it could provide could encourage more employers to offer plans, Barnash said. “Twenty percent of our clients own small businesses. Anything lawmakers can do to reduce administrative costs in retirement plans is a major plus for them,” he added.

“Electronic communication is no longer the exception, it is the norm,” said Alane Dent, ACLI acting senior vice president for federal relations. “Electronic disclosure offers efficiencies and cost savings in plan administration. Employee benefit plans should be permitted to use electronic, web-based solutions as a default means of delivering required disclosures.”

Email delivery will give workers more timely access to their financial information, making it easier for Americans to plan and save for retirement, Dent said.

The ACLI is supporting the provision in the bill giving employees the option to receive paper disclosures, she added.

The Insured Retirement Institute “enthusiastically supports these two bills that will remove some of the obstacles Americans face in planning for retirement,” Lee Covington, IRI senior vice president and general counsel, said in a statement.