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July 20, 2015

Office of Regulations and Interpretations

Employee Benefits Security Administration

Attn: Conflict of Interest Rule

Room N-5655

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

RE: RIN 1210-AB32, Conflict of Interest Rule

The American Academy of Actuaries1Lifetime Income Risk Joint Task Force respectfully 

requests your consideration of its comments regarding the Notice of Proposed Rulemaking on

Definition of Fiduciary; Conflict of Interest Rule-Retirement Investment Advice and Related 

Proposed Prohibited Transaction Exemptions. The notice poses many questions about the 

application of the rule, and we leave that discussion to other commenters, as our area of focus is 

on lifetime income needs and how they are addressed in the proposed rule. However, we would 

like to address another issue—advising on lifetime income needs—that could become part of the 

rule if it is adopted. 

Financial preparation for retirement has two phases—accumulation and decumulation. The focus 

of discussions in the financial press concerning retirement preparedness in recent years has been 

on accumulation; however, decumulation is equally important for retirement security and merits 

greater attention, particularly as larger numbers of Americans in the baby boomer generation are 

moving into retirement. 

The proposed rule is heavily focused on when advice creates a fiduciary responsibility and on the 

appropriateness of compensation. The stated intent of the guidance is to protect consumers and 

help them to better manage retirement savings. While this guidance is not specified as to 

applying to accumulation or decumulation, it provides an opportunity to give prominent

recognition to the need to advise on lifetime income needs during the decumulation phase after 

the individual has retired and in the transition from accumulation to decumulation. 

The Proposed Best Interest Contract Exemption would create a requirement that the totality of 

retirement investing be considered when particular investment advice is provided. Investment 

advice must be provided not just in relation to a single investment but rather within the context 

of the entire investment portfolio and the totality of retirement income needs. This requires 

 

1 The American Academy of Actuaries is an 18,500+ member professional association whose mission is to serve the 

public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing 

leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets 

qualification, practice, and professionalism standards for actuaries in the United States.
 1850 M Street NW Suite 300 Washington, DC 20036 Telephone 202 223 8196 Facsimile 202 872 1948 www.actuary.org

recognition of appropriate vehicles to create lifetime income when providing investment advice. 

This recognition of lifetime income needs should apply at all times, particularly when the 

individual is approaching or in retirement. 

Specifically, an adviser should be required to advise on a broad range of decumulation strategies 

and products when providing any advice to individuals as may be relevant to the individuals’

goals, requirements, and current circumstances. This requirement to discuss a broad range of 

options should exist regardless of the adviser’s ability or inability (through licensing or other 

limitations) to provide any specific strategy or sell any specific product. This requirement is 

necessary in light of the intertwining of the accumulation and decumulation phases needed to 

secure lifetime income.

It also would be useful for the Department of Labor (DOL) to have robust educational material 

and possibly an interactive tool available on its website to reinforce whatever information the 

adviser would provide on the complex topic of managing lifetime income. The site material 

should include information on lifetime income risks, which is essential for individuals to gain a 

better appreciation of their retirement income planning and management needs. Advisers should 

be required to direct their clients to such a site as part of the investment advisory process.

Through steps such as these, pre-retirees and retirees can be prepared to begin to address lifetime 

income needs both before they begin retirement and throughout their retirement.

*******************

We appreciate the DOL giving consideration to these comments. We welcome the opportunity to 

discuss our comments with you in further detail and offer to meet at your convenience.

Please contact Matthew Mulling, the Academy’s pension policy analyst (202-785-7868 or 

mulling@actuary.org) if you have any questions or would like to arrange a convenient time to 

discuss these items further.

Respectfully submitted,

Noel Abkemeier, MAAA, FSA

Co-chairperson, Lifetime Income Risk Joint Task Force

American Academy of Actuaries