Resources

Legislative Highlights - Winter 2025 Edition

The ERISA Advisory Council is a 15-member panel that represents employees, employers, the general public and various industries. Members are appointed for three-year terms with the maximum of five terms expiring on December 31 of each year. The ERISA Advisory Council advises the Department of Labor on ERISA related issues. In March, the Council chose possible reforms to QDIAs as one of their research topics for this year.

The recommendations included creating a “tips sheet” to assist plan fiduciaries in choosing QDIAs with lifetime income options, improving QDIA disclosure, and allowing the use of QDIAs in IRAs. The “tips sheet” which would “serve as a roadmap” for fiduciaries considering lifetime income options. Members of the Council agreed that this “could facilitate greater plan adoption” for lifetime income QDIA options. The document would focus on how to create a prudent process for selecting a lifetime income QDIA option.

A Unanimous “Yes” Vote on the Three EAC Proposals

The Council discussed three proposals and then held a vote, with everyone in attendance voting “Yes” to:

1. Issuing the “Tips Sheet” - The DOL creating and issuing guidance in the form of a comprehensive “Tips Sheet” to serve as a road map for plan fiduciaries when selecting and monitoring both nonguaranteed and guaranteed retirement income options, inside or outside of a QDIA.

2. Providing Fiduciary Guidance - The DOL would provide and update guidance to plan fiduciaries on giving participants education and notices regarding their QDIA investments in all phases of plan participation (accumulation, transition and decumulation).

3. Making QDIAs Available in IRAs - The DOL would amend the safe harbor for automatic, involuntary rollovers into individual retirement accounts (IRAs) to allow the use of the same QDIAs available to employer-sponsored plans.

Final Thoughts

These recommendations aim to establish a safe harbor for IRA investment rollovers, provide guidance for selecting retirement plan income options, and enhance participant education around the role of QDIAs in accumulation through the decumulation phases in retirement savings. If you have any questions regarding these proposed recommendations, please contact your local Spectrum representative.