Debate: Should Annuities Be Permitted as a Default 401(k) Option?

March 8, 2022 by Robert Bloink by William H. Byrnes

A bill has recently been reintroduced in Congress that would allow retirement plan sponsors to use annuities as a default investment option for plan participants who haven’t made an investment election.

Under current law, annuities are not an option that can be offered as a qualified default investment alternative (QDIA), which are a type of investment option used for plan participants who have not made their own investment decisions with respect to retirement plan funds. The Lifetime Income for Employees (LIFE) Act, which was originally introduced in 2020, does not appear to specify the exact types of annuity that could be used for this purpose.

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Originally Posted at ThinkAdvisor on March 3, 2022 by Robert Bloink by William H. Byrnes.