It’s been a big month for annuities. First, President Obama endorsed annuities as a tool that can give Americans a better shot at a more secure retirement.
Now the U.S. Departments of Labor and the Treasury are studying annuities and how they could bolster retirees’ ability to distribute assets. Some of the areas the study will focus on are:
The initiative is important given the shift from defined benefit plans that offer employees lifetime annuities to 401(k) and other defined contribution plans, Phyllis C. Borzi, assistant secretary for the Labor Department's Employee Benefits Security Administration, said in a statement.
"The other half of the retirement equation is distribution," she said. "Most workers aren't going to retire with your father's pension. Most workers are only covered by a 401(k) plan, and that's the only potential source of retirement income outside of Social Security."
The study will look at annuities as a possible solution to the asset distribution problem. The departments are currently soliciting public comments during a 90-day window.