Retirement plans can keep using old rules for picking annuity providers
What happened
The US Labor Department has withdrawn a new rule that would have changed how retirement plans pick companies to provide annuities. This means plans will continue to follow the older, less strict rules for choosing these providers.
Why it matters
The withdrawn rule aimed to make it easier for retirement plans to offer annuities, which provide guaranteed income in retirement. It would have given plan fiduciaries a 'safe harbor' from liability if they followed new guidelines. Now, plan administrators still face the same legal risks when selecting annuity providers, which often makes them hesitant to offer annuities at all.
The signal
Watch for any new proposals from the Labor Department that try to address the same issue of fiduciary liability for annuity selection, or if the industry pushes for legislative changes.