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Legislation reintroduced to allow annuities as default option in 401(k) plans


Federal lawmakers have revived a piece of legislation that would add annuities to Americans’ retirement plans, Financial Planning reported. The bill, known as the LIFE (Lifetime Income for Employees) Act, would let companies make annuities the default option in their employer-sponsored retirement plans when savers don’t specify how they want up to half of their 401(k) money to be invested. Plan sponsors would not be required to offer annuities. Savers automatically kicked into the contracts could opt out within 180 days if they later decide they’d rather be in stock or bond funds. U.S. Reps. Donald Norcross, a New Jersey Democrat, and Tim Walberg, a Michigan Republican, reintroduced the legislation on Tuesday, refreshing a bill they originally brought forth in late 2020. In a letter Tuesday, the Insured Retirement Institute, the industry’s main trade group and lobby, wrote to lawmakers in support of the bill, saying it would “go a long way toward helping address the insecurity and anxiety workers and retirees across America are feeling today about their ability to accumulate sufficient savings to provide them with income that will last throughout their retirement years.”

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