H.R. 5297; Partial Annuitization Approved by House Members

House Bill Could Provide Added Flexibility for Americans Saving for Retirement

Milwaukee, WI (September 27, 2010) – Members of the House today voted 237-187 to approve H.R. 5297, a bill that includes a provision that could make it easier for annuity holders to annuitize a portion of the assets held in a contract.

The partial annuitization provision would help annuity holders keep some assets “as is” in a contract, as well as annuitize other assets. Today, annuity holders who want to do that must exchange a single annuity for two smaller annuities, and then annuitize the assets in one of the new annuities.  

“This is a very encouraging step made by Congress,” said Kim O’Brien, executive director of NAFA. “This shows us our lawmakers are recognizing the importance of fixed annuities for retirees and those planning retirement.” Currently, deferred fixed annuities are the only retirement product that can guarantee an income stream, a minimum interest rate to ensure tax-deferred accumulation, and protect 100% of your principal as well as prior interest from investment market downturns, O’Brien noted.
H.R. 5297 would allow more retirees to utilize these products to secure their retirement income if President Obama signs this bill into law. Frank Keating, president of the American Council of Life Insurers, Washington, also put out a statement hailing the bill, “The provision provides additional flexibility to a product that is playing a crucial role in helping Americans achieve retirement income security.”

In addition to the partial annuitization provision, the bill includes a provision that could help retirement plan participants roll 401(k), 403(b) or 457 assets into Roth versions of the accounts. Today’s approval from the House rides on the heels of last week’s Senate action that passed The Small Business Lending Fund Act, which President Obama is expected to sign into law soon. The bill is a vehicle for getting many loan programs and tax break extension provisions through Congress.

NAFA, the National Association for Fixed Annuities, is a national trade association exclusively dedicated to promoting the awareness and understanding of fixed annuities – including income, declared rate, market value adjusted and indexed.  NAFA is the only association whose sole purpose is advocating for the fixed annuity product and educating regulators, legislators, consumers, members of the media, industry personnel, and distributors about fixed annuities and their benefits to retirees and those planning retirement. NAFA’s membership of fixed annuity carriers and independent marketing organizations (or field organizations) represents over 200,000 agents and registered representatives selling fixed annuities.  NAFA was founded in 1998 and is headquartered in Milwaukee, Wisconsin.  Get more information on annuities at www.nafa.com.

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