The SECURE Act Brings New Opportunities for Annuities
March 11, 2020 by Curtis V. Cloke
Last December, the new SECURE Act was signed into law by President Trump after receiving bipartisan support in Congress, spurring significant changes to annuity regulations and expanding the potential for annuities in retirement planning. As the industry grapples with the opportunities and limitations brought by the act, advisors should take heed of these changes and reevaluate the best path forward for clients.
Addressing Fiduciary Concerns
One goal of the SECURE Act is to help relieve fiduciaries’ responsibilities when including annuities as offerings within 401(k) plans. Prior to the SECURE Act, group offerings were limited, and some of the lifetime income annuity options that could potentially fit well into retirement plans were mothballed. However, the SECURE Act now allows group retirement plans to include deferred income annuities and a variety of deferred annuities that provide both single and joint-spousal lifetime income riders. This is a substantial legislative victory for annuity providers and supporters of lifetime income retirement options, and the insurance industry will likely step up to the plate with renewed product development.