June 26, 1991
TO: PENSION COMMITTEE NO. 18-91
INVESTMENT ADVISERS COMMITTEE NO. 28-91
RE: DOL SOLICITS COMMENTS REGARDING ANNUITY SELECTION
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The Department of Labor is soliciting public comments for
consideration in deciding (1) whether to propose a regulation
relating to the purchase of annuity contracts for plan
participants and beneficiaries and (2) if so, whether and to what
extent any such regulation should provide minimum standards for
determining whether the plan is relieved of future liability with
respect to the participant or beneficiary for whom the annuity is
purchased.
The attached notice of proposed rulemaking contains 34
questions regarding annuitization of participants under employee
pension plans. These questions are divided into the following
general areas:
1. The processes now being utilized by employers, consultants
or others in selecting annuity providers;
2. The efficacy of state regulatory requirements and guaranty
programs;
3. The reliability and usefulness of ratings by nationally
recognized ratings services;
4. Other criteria concerning financial security such as
objective measures which the Labor Department could impose;
5. Protections afforded by reinsurance and other risk and cost
sharing arrangements in the insurance industry; and
6. The affect on plan sponsors, annuity providers,
participants, other governmental agencies or others by the
establishment of Department of Labor regulation in this area.
Comments must be received by the Department by August 20,
1991. Therefore, please provide me with any comments you may
have by August 1, 1991. We will keep you informed of
developments.
W. Richard Mason
Assistant Counsel - Pension
Attachment