Lawmakers, Experts Urge ‘Choice’ in Congressional Hearing on Annuities

Lawmakers and industry leaders emphasized that expanding retirement income options — particularly by increasing access to annuities — would benefit American workers, stressing the importance of giving workers more choice in planning for retirement during a congressional hearing on Wednesday.

At a hearing held by the House Committee on Education and the Workforce’s Subcommittee on Health, Employment, Labor, and Pensions, “Modernizing Retirement Policy for Today’s Workforce,” lawmakers consistently cited the Department of Labor’s safe-harbor framework — originally established by regulation in 2008 and later strengthened by the SECURE Act of 2019 and the SECURE 2.0 Act of 2022 — as the key legal foundation that has already facilitated the inclusion of annuities in retirement plans. Witnesses recommended that any future policy changes should build on existing safeguards, focusing on clearer fiduciary standards and default investment rules, rather than steering retirees toward one-size-fits-all products.

“We must remain committed to preserving the ability of retirees to choose how and when their retirement savings are paid out,” Committee Chair Rick Allen, R-Georgia, said in his opening remarks.

Meanwhile, Ranking Member Mark DeSaulnier, D-California, stated in his opening remarks that lifetime income solutions were “a completely nonpartisan issue,” while simultaneously urging colleagues to proceed carefully in considering going beyond existing safe-harbor rules that facilitate plans offering annuities. DeSaulnier argued that while products billed as providing lifetime income can help individuals secure their retirement, the products can also be “opaque and complex,” and the retirement debate cannot be separated from wage pressure and household costs that leave many workers unable to save at all.

Still, lawmakers and witnesses testifying before the committee mostly agreed that plan participants would benefit from receiving more choices for handling the decumulation phase of retirement.

Offering Choices

Surya Kolluri, head of the TIAA Institute, the research arm of TIAA, a financial services organization that has offered annuity products for decades, told lawmakers that research shows 45% of households are projected to run short of money in retirement and that many Americans fear running out of money more than they fear death.

Defined contribution plans have improved saving, Kolluri said, but often fail to convert balances into income that lasts for life. His prescription, however, leaned heavily on optionality: encourage lifetime income in-plan defaults and require plans to offer a menu of “qualified payout options,” not just a lump sum.

“Let’s give them choices,” Kolluri said, arguing that workers get a range of choices while saving, but face a difficult cliff at retirement when they are handed a lump sum and little guidance.

Annuity Adoption Remains Low

Ken Levine, executive director of global retirement strategy at RTX Corp., presented RTX’s lifetime income strategy, a default investment option the company launched in 2012 that embeds insurance into a target-date-like structure. Levine emphasized that the approach is designed to preserve flexibility — keeping assets liquid and accessible, with balances able to pass to heirs — while providing a backstop if withdrawals deplete the account.

He said misconceptions have slowed adoption elsewhere, including plan sponsors’ fears that participants do not want guarantees, that products are too complex and that defaults “lock” workers into unwanted choices. A 2025 study by Greenwald Research and TIAA, for example, which surveyed 225 finance leaders in the 403(b) and 401(k) markets, found that 20% of respondents had offered guaranteed income annuity products.

Levine said the policy goal should be helping retirement plans offer solutions while leaving workers room for participants to opt in, opt out and tailor income to their needs.

Adding Guardrails

In September 2025, the Department of Labor backed such offerings when it cleared AllianceBernstein’s lifetime income strategy for use as a qualified default investment alternative, meaning it could be the default investment option for some retirement plans.

Meanwhile, Nari Rhee, director of the retirement security program at the University of California, Berkeley’s Labor Center, said interest in lifetime income is legitimate, particularly as the use of traditional defined benefit pensions fade, but she urged “strong guardrails” if Congress pushes annuities deeper into 401(k) plans, including as a default investment option.

Pricing can be opaque, Rhee said, and some products involve long-term commitments, making them “a lot more complicated” than investments in target-date funds. Any expansion, she argued, should include careful standards for defaults, protections against excessive costs, and disclosures that enable “apples-to-apples” comparisons. She also emphasized the broader inequity problem: Nearly half of workers lack employer-sponsored retirement plans, many have little or no savings, and Social Security remains the bedrock for millions of workers.

Furthermore, Rhee offered a broader point echoed by several Democrats during the hearing: For most workers, retirement insecurity is driven by wages and cost-of-living pressures that limit the ability to save in the first place.

‘Greatest Dream’ or ‘Greatest Nightmare’?

In order to make annuities work, workers need to have money saved to purchase the annuity. However, millions of Americans either lack access to a retirement account, have too little in savings or cannot afford to save, Rhee said; annuity purchasers tend to be from the middle class. A 2022 Gallup survey, for example, found that 70% of individual annuity owners have household incomes less than $100,000, and 25% make less than $50,000.

Wayne Chopus, CEO of the Insured Retirement Institute, leaned into the appeal of predictable “mailbox money” — a guaranteed monthly check that can ease anxiety about outliving savings. Chopus repeatedly cast annuities as a form of insurance, akin to insuring a home or car.

But he, too, underscored that expanded access should mean more options, not more requirements, and Congress should make it easier for plans to offer lifetime income with confidence in the rules.

Lawmakers from both parties echoed that approach. Representative Donald Norcross, D-New Jersey, highlighted the “greatest dream and the greatest nightmare” of retirement, saying that while some workers may want to manage withdrawals themselves, others want the certainty of a guarantee — and Congress should make sure the system can accommodate both.

“It’s a choice for the annuity; it doesn’t mean anybody has to take it,” Norcross said.

Still, Democrats who spoke at the hearing repeatedly stressed that expanding financial products cannot substitute for strengthening Social Security, boosting wages and addressing household costs that squeeze retirement saving. Republicans and industry witnesses focused more on improving plan design and encouraging adoption of in-plan decumulation options by clarifying fiduciary rules and safe harbors.

Even as Republicans and Democrats sparred over inflation, wages and Social Security, there was clear overlap on a narrower legislative path that would build on existing compliance scaffolding from the DOL and the SECURE acts to make lifetime income options easier to offer, easier to compare and safer to use as a default — without mandating annuitization.

However, Representative Mark Takano, D-California, returned to the question of whether the average American has sufficient savings for annuitization to be relevant. Rhee responded that many people approaching retirement have balances too small to meaningfully replace income via annuitization and suggested the debate risks becoming detached from the financial reality facing most households.

“Most Americans are struggling to even just save at all,” Takano said.

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