The American Council of Life Insurers (ACLI) is calling on US lawmakers to back a set of federal policy changes aimed at expanding access to annuities in workplace retirement plans.
The industry group says the measures would help more savers convert defined contribution balances into guaranteed income in retirement.
In written testimony to the Senate Committee on Health, Education, Labor and Pensions, ACLI president and CEO David Chavern (pictured above) said demand for guaranteed income is rising.
“As more Americans recognize the importance of guaranteed lifetime income in their retirement planning, it is essential that public policy is aligned to ensure savers' access to annuities,” he told lawmakers.
Recent market data indicates that interest is already translating into higher sales. LIMRA reported that total US annuity sales reached $119.5 billion in the second quarter of 2025 and $226.1 billion in the first half of the year, a 4% increase over the same period in 2024, and projects that annuity sales could exceed $400 billion for the full year.
One of ACLI’s proposals would require defined contribution plans to offer an annuity option. Under the framework outlined to lawmakers, participants in plans such as 401(k) and 403(b) arrangements could elect an immediate single-life or joint-and-survivor annuity for all, or part, of their account balance.
The trade group is also seeking changes to rules governing default investment alternatives. It wants Congress to update liquidity requirements in the Internal Revenue Code and under the Employee Retirement Income Security Act so that default options can include annuities, provided that participants receive disclosures explaining any liquidity constraints.
Additionally, ACLI is backing an optional retirement plan feature targeted at older workers. The proposal would allow participants aged 50 and above to take an in-service rollover to purchase an annuity while they are still employed.
The group is further recommending revisions to tax code model rollover notices. The suggested update would ensure that the notices explicitly highlight the option to roll assets to an individual retirement annuity under Section 408(b) of the Internal Revenue Code.
Analysts say the life and annuity sector is positioned to support continued growth in these products.
AM Best has maintained a stable outlook on the US life and annuity segment, citing “steady top-line growth” and strong capital levels, while noting that annuity sales “continue to surge with record results in the last few years,” even as competition puts pressure on guarantees, crediting rates and investment strategies.
Chavern told the committee that Americans have “many retirement income strategies” available as they plan for life after work.
However, he argued that “the only true lifetime income product in the marketplace – one that guarantees retirees won't outlive their retirement savings – as the annuity that only life insurers can offer,” placing the product at the center of ACLI’s retirement-income agenda.
