IRI VISION: TURNING 401(K) SAVINGS INTO LIFETIME INCOME: IRI URGES DOL TO CLEAR THE PATH

The Real Retirement Question
For most Americans, retirement planning begins with saving. But eventually, every worker faces a more important question: How do I turn those savings into reliable retirement income that will last?

That question is becoming increasingly urgent as 401(k)-style plans play a larger role in retirement security. While these plans have helped millions build nest eggs, retirees also need confidence that their savings can provide dependable income even if they live longer than expected, retire during market volatility, or face years of economic uncertainty.

That challenge is at the heart of IRI’s comments to the Department of Labor (DOL) on its proposed rule, Fiduciary Duties in Selecting Designated Investment Alternatives.

Why the DOL Proposal Matters
The proposal would give retirement plan fiduciaries a clearer framework for evaluating investment options and determining what is in participants’ best interests.

IRI supports DOL’s effort to reinforce an important principle: fiduciaries should be judged on whether they followed a prudent process, not on investment outcomes viewed through the lens of hindsight.

Greater clarity can help fiduciaries make decisions with confidence and consider a broader range of tools designed to improve retirement outcomes.

Lifetime Income Addresses Consumer Concern
A key focus of IRI’s comments is the role of annuities and other lifetime income products.

Unlike traditional investments that primarily seek growth, these solutions are designed to help retirees convert savings into protected income that can last throughout retirement.

Workers and retirees consistently cite concerns about outliving their savings, navigating market downturns, and maintaining predictable income in retirement. Lifetime income products can help address those concerns by providing income stability and protection against longevity risk.

IRI urged DOL to recognize that these products serve a different purpose than traditional investment funds and should be evaluated accordingly.

A Flexible Framework for Fiduciaries
IRI also recommended that DOL make clear that its proposed safe harbor is flexible and non-exclusive. Fiduciaries need the ability to evaluate options based on their plan design, participant demographics, and retirement goals, not a rigid checklist that could discourage innovation or invite unnecessary litigation.

Helping Americans Retire with Confidence
The bottom line is simple: retirement plans should help people save, but they should also help them turn those savings into lasting financial security.

With the right refinements, DOL’s final rule can give fiduciaries a stronger framework for evaluating lifetime income solutions and help more Americans convert retirement savings into income they can count on for life.

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Contact: Dan Zielinski