The Department of Labor’s (DOL) ERISA Advisory Council, a group that sets the standards for the most established pension plans in the private sector, held hearings June 19-21 to revisit ERISA regulations and discuss the need for protecting retirement savers against the risk of outliving their savings.

Elizabeth MacGowan, Vice President of Strategy & Business Development at National Life Group, testified on behalf of the Indexed Annuity Leadership Council (IALC) to have qualified default investment alternative (QDIA) rules modified to include products like fixed indexed annuities (FIAs). Allowing for lifetime income options, like FIAs, would respond to consumer demand and help improve America’s retirement savings outlook.

Americans are lagging when it comes to preparing for their golden years – either by not saving enough or not considering early on how to build a savings portfolio that creates a steady, guaranteed income stream, no matter the length of their retirement. Despite this fact, according to a recent IALC survey, 78 percent of workers are above all looking for a lifetime income stream when it comes to retirement planning. In turn, Americans should consider adding a financial product like an FIA to meet this need. However, FIAs are not currently available as an option in ERISA plans.

Throughout her testimony, MacGowan emphasized how annuity solutions with lifetime income features could be beneficial to this retirement need. To date, retirement planning needs are not being met for the approximately 141 million American workers who are saving for retirement through ERISA plans.

Here are three key points MacGowan shared with the Council:

1. Even though majority of Americans seek lifetime income in retirement, QDIA regulations prevent the use of many kinds of annuities, including FIAs or those with lifetime income riders, from being provided in ERISA plans and fulfilling the demand for lifetime income in retirement.
2. In addition to revising QDIA regulations, there are many avenues available for FIAs to fit QDIA standards for an ERISA plan.
3. Because FIAs provide sought-after riders, such as the guaranteed lifetime income rider, as well as protection from market losses, they are a great option to help pre-retirees minimize risks in the loss of their nest eggs.

Evident in MacGowan’s testimony, she spoke in clear interest of those who would most deeply be affected by her proposed addition of annuities, as a QDIA in an ERISA plan: those entering retirement and those in auto-enrollment plans.

Read MacGowan’s full testimony to the ERISA Advisory Council here.