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Organizations Urge Protections for Women in Lifetime Retirement Income Options

For Immediate ReleaseContact: Nancy Hwa, 202-296-3776
May 03, 2012www.pensionrights.org

Eight national women’s organizations and the Pension Rights Center submitted comments to the Department of the Treasury, generally supporting proposed IRS rules aimed at encouraging lifetime income options in retirement plans. Noting that “women are more economically vulnerable in retirement than men,” the groups also made several suggestions to strengthen the rules to better protect women and lower-income workers.

Among the points made in the May 3, 2012, comments:

  •  The organizations supported a proposed regulation that would to allow participants in traditional pension plans to take a portion of their benefits as a lump sum and the remainder as an annuity. 
    • However, they also recommended that the proposal clarify that any early retirement, joint-and-survivor, or other subsidy that would apply to a full annuity would also apply to these “partial annuities” on a pro-rated basis.
  •  The organizations supported a proposed regulation that would allow participants in retirement savings plans, such as 401(k)s, to purchase annuities that start at a later age, such as age 85, (if they are worth $100,000 or 25 percent of an account balance or less) without being subject to IRS minimum required distribution rules at age 70-½. 
    • However, they also urged that the rule be clarified to ensure that these “longevity annuities” include joint and survivor protections.
    • They further asked that longevity annuities purchased with IRA assets be required to use sex-neutral pricing and provide spousal survivor protections.
  • The organizations supported an IRS revenue ruling that would make it possible for participants in retirement savings plans, such as 401(k)s, to roll over their account balances to purchase annuities from their employers’ pension plans (if the employers allow this).
  • The organizations asked that another IRS revenue ruling -- on the timing of spousal consent for deferred annuity contracts purchased in a 401(k) plan -- be clarified to address changes in marital status.

The joint comments were submitted in response to

Signing on to the comments were the American Association of University Women (AAUW); the Feminist Majority Foundation; MANA, A National Latina Organization; the National Association for Female Executives; the National Council of Women’s Organizations; the National Organization for Women; the National Women’s Law Center; OWL-The Voice of Midlife and Older Women, and the Pension Rights Center.

Read the comments.

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