President Biden took the stage this week to talk about how to help retirement savers. He spoke about families who save throughout their lives to enjoy a secure retirement. That is what our industry’s mission – and very existence – is about: helping families fulfill the dream of a secure and dignified retirement. We do this work proudly.
We were shocked and disillusioned by many of the President’s remarks. It was a speech filled with unsubstantiated rhetoric and devoid of factual evidence rationalizing a new rule imposing unnecessary regulatory burdens on investment advice.
Rather than explain why the rule is necessary, the President demonized and joked about the insured retirement industry and our products to justify a misguided and previously failed investment advice regulation. Worse, the President disparaged our industry and its workers by inventing a link to his efforts to fight “junk fees.” In fact, there is no mention of that term in the 495 pages of the new regulation he announced.
The insured retirement industry champions workers and retirees and has long sought bipartisan policies to strengthen financial security. We aim to do this by expanding retirement saving opportunities and facilitating protected lifetime income solutions to secure a dignified retirement for workers, retirees, and their families. Our products uniquely deliver guaranteed retirement income, similar to the defined benefit pension plans available to many union and government workers.
Millions of workers and their families have chosen to purchase annuities to protect their retirement assets and provide a stream of guaranteed lifetime income. These individuals, whose median household income equals $70,000, rely on our industry’s innovative products to meet their accumulation, income, and asset protection needs. No doubt, many of them were also not amused by the President’s jokes and misinformation made at our industry’s and at their expense.
Financial professionals – dedicated, caring women and men – work daily in communities across the nation to provide tailored financial strategies and products that serve their clients’ best interests. Consumers should be able to choose the financial professional that best meets their needs and feel protected under a system of rigorous regulation and enforcement. This system exists today under federal and state law.
The President’s proposed fiduciary rule will harm the very consumers he wants to help and deepen the nation’s retirement crisis by limiting access to sound financial advice. A similar regulation in 2016 by the Obama-Biden Administration caused 10.2 million retirement account holders with $900 billion in savings to lose access to their financial professionals.
A study by Quantria Strategies, LLC for the Hispanic Leadership Fund found that reinstating that rule would increase the wealth gap for Black and Hispanic Americans by 20 percent when looking at accumulated IRA (individual retirement account) savings alone. Thankfully, a federal court vacated that rule in 2018.
IRI will fight this latest proposal as tenaciously as we fought and defeated the 2016 rule.
We are committed to protecting the rights of workers, retirees, and their families to ensure that they are not deprived of access to retirement savings strategies, choice of products to execute those strategies, and the right to choose their financial advisor on terms that best fit their needs.
President Biden and the Department of Labor showed a fundamental misunderstanding of how the insurance industry and annuity products work for the benefit of consumers. As always, IRI stands ready to provide education and information that fosters a greater understanding of our industry, its mission, and its products to policymakers who share our commitment to retirement security for all.
PROPOSED NASAA MODEL RULE THREATENS ACCESS TO ANNUITY PRODUCTS FOR RETIREMENT, UNDERMINES FINANCIAL SECURITY
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