The Importance of Lifetime IncomeIn today’s aging society, the widespread assurance of lifetime income is the single most important step needed to improve the retirement security of older Americans. The American Academy of Actuaries believes that retirement security can and should be significantly improved by the promotion of lifetime income, and that actuaries have an important role to play. The Academy has identified lifetime income as a top public policy issue and strongly supports initiatives that will lead to more widespread use of lifetime income options.
BackgroundIn August 2011, the Academy’s Public Interest Committee (PIC) sought input from the membership on a proposed statement advocating stronger public policy support for lifetime income solutions for Americans. The membership response was strong, encouraging, and helpful in determining Academy direction. The PIC ultimately concluded that the actuarial profession has much more to say than could be captured in a single, brief position statement.
The Academy expanded the lifetime income public interest statement to a longer-term initiative to:
- Promote meaningful discussions both within and outside the profession;
- Actively engage with the public policy community;
- Host discussion symposia on longevity, longevity risk, and lifetime income;
- Coordinate efforts of the life and pension practice councils; and
- Develop actuarial policy statements.
In February 2011, the Life Practice Council and the Pension Practice Council created the Lifetime Income Risk Joint Task Force to address the risks and related issues of inadequate lifetime income among retirees. The goal of the task force is to educate the public, lawmakers, regulators, financial advisors, employers and the media on the risk of inadequate lifetime income.
Academy Lifetime Income Public Statements
- Risky Business: Living Longer Without Income for Life Legislative and Regulatory Issues report that examines the importance of a secure income that lasts a lifetime (Oct. 23, 2015)
- Risky Business: Living Longer Without Income for Life Actuarial Considerations for Financial Advisers issue brief that provides actuarial insights regarding lifetime income planning (Oct. 23, 2015)
- Risky Business: Living Longer Without Income for Life Information for Current and Future Retirees issue brief explaining how risk sharing can help manage longevity risk (Oct. 23, 2015)
- The Challenge of Longevity Risk: Making Retirement Income Last a Lifetime international report that examines longevity risk under the retirement systems in the United States, Australia, and United Kingdom (Oct. 23, 2015)
- Retiree Lifetime Income: Choices & Considerations issue brief exploring key decisions and options available in the years leading up to and during retirement (Oct. 23, 2015)
- Retiree Lifetime Income: Product Comparisons issue brief that examines general insurance and investment products to create lifetime income (Oct. 23, 2015)
- Pension Committee comments on proposed lifetime income benefit statements (August 7, 2013)
- Risky Business: Living Longer Without Income for Life briefing on Capitol Hill (June 27, 2013)
- Risky Business: Living Longer Without Income for Life a discussion paper by the Lifetime Income Risk Joint Task Force (June 19, 2013)
- Lifetime Income—Risks and Solutions webinar (March 7, 2012)
- Congressional Testimony on Longevity Risk: Pension Practice Council testimony to a Senate Special Committee on Aging hearing on retirement savings (June 11, 2010)
- Pension Practice Council and Life Practice Council letter to the departments of Labor and Treasury regarding lifetime income options for participants and beneficiaries in retirement plans. (May 3, 2010)
Pension Committee letter to Representative Pomeroy regarding the Retirement Security Needs Lifetime Pay Act of 2009. (November 18, 2009)