The Insured Retirement Institute plans to lobby Congress to make it easier for small employers to band together to offer retirement plans and make retirement savings more accessible, IRI leaders said Wednesday.
Currently, barriers exist that prevent many small employers from joining others to offer group retirement plans to all of their employees and IRI would like these barriers removed.
The leaders of the institute, which represents the retirement industry, laid out IRI’s legislative agenda for 2018 during a press conference Wednesday. All of the initiatives are aimed at increasing access to retirement plans and encouraging people to save for retirement.
“The blueprint will guide IRI’s dialogue with Congress and the [Trump] administration about providing sustainable strategies to address the challenges Americans are facing as they seek to save for retirement and achieve a secure and dignified retirement,” IRI said in a statement.
“The blueprint was constructed on the pillars of expanding opportunities to save, increasing access to lifetime income in retirement, helping savers make decisions about their finances for their retirement and protecting older investors from financial exploitation,” said Lee Covington, IRI senior vice president and chief counsel.
Only 23 percent of baby boomers and Gen Xers feel highly confident they will have enough money for retirement and only 40 percent have actually calculated what they will need. This has created an alarming situation where people have under-saved for long retirements, Covington said.
“There has never been a time where we have had more support for legislation” to expand access to retirement savings plans, he added. Eleven bills are currently pending in Congress, many with bipartisan support, that would help retirees.
One of the IRI legislative priorities is to remove two requirements that hinder multiple employer retirement plans. One requires that small businesses joining to create such a plan have something in common, such as similar products or services. Another, called the “one bad apple” rule, allows all members to be punished if one employer violates regulations.
Congress also should require all but the smallest employers to automatically enroll employees in a retirement plan and should make it easier and cheaper for small employers to create such plans. For instance, the government could pick up the cost of administering a retirement plan for the first five years after it is created, IRI said.
IRI will ask Congress to make annuities that are part of a retirement plan portable and to clarify fiduciary requirements for those providing access to annuities. All agencies, the Department of Labor, SEC and state regulatory agencies, need to coordinate activities around the fiduciary rule so that no conflicts emerge, said Jason Berkowitz, vice president and counsel for regulatory affairs. IRI has always fought for any advisors offering personalized advice to place the clients’ interests first, he added.
Other priorities include changing the law that requires retirees to take a minimum distribution from retirement accounts starting at 70.5 years of age to at least 75 to reflect people‘s longer life spans, IRI said.