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House subcommittee hears industry, researchers debate lifetime-income options for 401(k) plans
Summary
Witnesses and members discussed proposals for embedding lifetime-income options in defined contribution plans, tradeoffs between guarantees and fees, and the need for consumer guardrails and education; lawmakers signaled bipartisan interest but no formal action was taken.
A House Education and Labor subcommittee on health, employment, labor and pensions held a hearing examining whether defined contribution plans should offer built-in lifetime-income options and what protections would be needed if Congress acts.
The chair opened the session saying the hearing would evaluate “additional and more flexible payout options” for 401(k)-style plans and asked witnesses to explain how those options could offer predictable income while preserving participant choice. Ranking Member DeSaulnier cautioned lawmakers to protect ERISA participants and flagged broader problems—stagnant wages and rising health-care costs—that limit many workers’ ability to save.
Surya Kulluri of the TIAA Institute said research shows a substantial share of households face shortfalls in retirement and urged three policy steps: encourage guaranteed lifetime-income products as default qualified default investment alternatives (QDIAs), require plans to offer a menu of qualified payout options or “coupons,” and expand “longevity literacy” so savers better estimate how long they will need income. Kulluri said…
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