GAO Report Highlights Vital Role Annuities Can Play in Helping People Secure a Paycheck for Life

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Jul 01, 2011, 01:31 ET

WASHINGTON, July 1, 2011 /PRNewswire-USNewswire/ -- ACLI President & CEO Dirk Kempthorne issued the following statement today in reaction to the Government Accountability Office (GAO) report, "Ensuring Income Throughout Retirement Requires Difficult Choices":

"The Government Accountability Office (GAO) issued a report today that validates the vital role annuities can play in helping people secure a paycheck for life. http://www.gao.gov/new.items/d11400.pdf

"An annuity is an insurance contract under which a life insurer guarantees to make payments to a person over a specified period or their lifetime. In other words, it provides a paycheck for life.

"GAO's report should be read by workers and retirees, as well as financial planners and policymakers. It makes clear that annuities represent an opportunity for lifetime retirement income to supplement Social Security.

"The report describes proposals to encourage the availability of annuities in defined contribution plans, which ACLI supports.

"The report also notes other proposed options aim to improve individuals' financial literacy. ACLI strongly believes improved financial literacy will help people make the right choices about lifetime money management.

"GAO said that one proposal to boost financial literacy calls for employer-sponsored retirement plan participants to receive estimates on lifetime annuity income on their benefits statements. ACLI strongly supports this bipartisan legislation, 'The Lifetime Income Disclosure Act,' which has been introduced in both the House and the Senate.

"This report demonstrates that for many people, annuities represent more than a choice - they are a necessity."

SOURCE American Council of Life Insurers