Labor Department’s Fiduciary-Only Package Harms Retirement Savers

WASHINGTON-American Council of Life Insurers (ACLI) President and CEO Susan Neely issued the following statement today on the Department of Labor's fiduciary regulation:

"The final fiduciary-only regulation released today by the Department of Labor resurrects past mistakes that will harm retirement savers and their access to the professional financial guidance they want and need.

"Despite substantial concerns voiced by members of Congress and echoed in the thousands of comments from consumers, the Department chose to move forward with a regulation that is alarminglysimilar to the Department's 2016 regulation. Before it was struck down by a federal court, that regulation resulted in more than 10 million American workers' accounts with $900 billion in savings losing access to professional financial guidance.

"The Department also has chosen to ignore the significant progress made to strengthen consumer protections since 2018. To date, 45 states have adopted the 'best interest of consumer enhancements' in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation.More than 90% of Americans now live in a state that has adopted a best interest standard for annuity sales. These new laws and regulations also alignwith the SEC's Regulation Best Interest, providing robust consumer protections at the state and federal levels.

"These measures represent a better way to protect consumers than the Department's ill-advised regulation. They enhance the standards financial professionals must follow, and, unlike the Labor Department's fiduciary-only approach, they safeguard consumers' access to, and information about, annuities,the only financial product in the marketplace that can provide guaranteed income for life.

"The regulation is out of touch with real-life issues facing retirement savers. More than 4.1 million Americans will be turning 65 each year through 2027. Most of them will not have access to traditional pensions and will need options for lifetime income like annuities provide. Now more than ever, public policy should expand and not limit people's options for retirement.

"The Department's actions also defy legislative efforts to tackle retirement vulnerabilities for middle-income earners. The U.S. Congress reaffirmed the importance of lifetime income when it passed legislation in 2019 and 2022 that made it easier for employers to include annuities in workplace retirement plans. Regulations that impede this progress cannot and will not stand.

"ACLI will carefully scrutinize the regulatory package and consider what can be done to ensure retirees have access to the professional help and financial products they want and need for a secure retirement."

The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI's member companies are dedicated to protecting consumers' financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI's 275 member companies represent 93 percent of industry assets in the United States.