13 Lincoln

Financial Groupe

VIA Electronic Mail
e-ORI @dol.gov

August 16, 2010

Law DEPARTMENT

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
1300 SOUTH CLINTON STREET

FORT WAYNE, IN 46802

David J. Kolhoff, Senior COUNSEL
Phone: 260-455-6095

Fax: 260-455-5135

David. Kolhoff@LFG.com

Office of Regulations and Interpretations
Employee Benefits Security Administration
Attn: Lifetime Income Joint Hearing

Re: Lifetime Income Joint Hearing / Request to Testify
Dear Sir or Madam:

Lincoln Financial Group (“LFG”) has participated in the retirement plan marketplace for
over 50 years. We have been a leader in developing lifetime income solutions for defined
contribution (“DC”) plans, including a product that was the subject of a Private Letter
Ruling that we requested in August 2005 and received in September of last year, i.c.,
PLR 200951039. That PLR concerns a product named i4LIFE® Advantage (“i4LIFE”)
for “income for life.” We continue to develop other products for the DC marketplace and
respectfully request the opportunity to testify at the Hearing on Certain Issues Relating to
Lifetime Income Options for Participants and Beneficiaries in Retirement Plans to be
held on September 14 and, if necessary, September 15, 2010. To ensure receipt of this
request, I have included it in the body of our email submission as well as attaching it
hereto.

If this request is granted, Eric S. Levy, Vice President, Head of Defined Contribution
Products will be LFG’s witness. He will testify on the following three topics of the five
listed in the Notice of hearing.

1. Certain Specific Participant Concerns Affecting the Choice of Lifetime
Income Relative to Other Options. (Three minutes.)

a. Inflation risk — Use of variable annuities invested in equities can
alleviate inflation concerns associated with fixed annuities and can
also provide “floor” and other benefit guarantees.

b. Products have been designed with reasonable and simple fee structures
such as LFG’s i4LIFE.

c. Products have been designed which provide for withdrawal options
and death benefits until a plan participant reaches an advanced age,
such as age 85. Until that age is reached, the participant may
withdraw some or all of his account balance. While such partial



withdraws will reduce the lifetime income amount currently being
received, there is no penalty.

d. The long-term viability of the issuer of the lifetime income benefit
annuity is enhanced by the regulatory regime imposed on insurers by
state insurance departments and could be enhanced by encouraging
state guarantee funds to include lifetime income annuities issued in
connection with DC plans and provide some coverage for variable
annuities.

2. Fiduciary Safe Harbor for Selection of Lifetime Income Issuer or Product.
(Three minutes.)

a, The criteria applicable to the selection by a plan sponsor of a lifetime
income product provider should be objective and easily determined.
The applicable regulations at 29 CFR 2550,404a-4 should be changed
as follows:

i. The requirement in Subsection (b)(2) should be eliminated since,
as a practical matter, a plan sponsor cannot make the determination
about the claims paying ability of the issuer without engaging an
outside expert. This matter could as easily be determined by the
standing of the insurer in its domestic (home) jurisdiction (state)
and by reference to readily available private industry ratings.

ii. The requirements in Subsection (b)(4) & (5) should be eliminated
for the same reasons noted in i. immediately above. It should not
be necessary for a plan sponsor to engage an expert to make a
determination for which objective criteria are readily available.

b. We do not believe that different criteria should be applicable based on
the size of the plan since the fiduciary responsibility and the
importance of this matter to plan participants is the same for large and
small plans.

c. Different criteria should apply depending on the type of lifetime
income product with acknowledgement that only insurers can offer a
product guaranteed by the insurers’ solvency.

d. As noted above in Item 1.d., the Department of Labor could encourage
state insurance guarantee associations to include annuities issued in
connection with DC plans. We believe that the current state insurance
company regulatory regime, along with private industry rating
regimes, provides sufficient standards regarding solvency of insurance
companies and additional standards from the Department of Labor are
not needed.



e. The safe harbor should only be provided to other lifetime income
options if those options provide the same solvency guarantees
provided by insurers who issue annuities.

3. Alternative Designs of In-Plan and Distribution Lifetime Income Options.
(Four minutes.)

a. The required use of unisex mortality tables for DC plans provides a
distinct disincentive for males to use in-plan lifetime income options
compared to out-of-plan annuity options.

b. Use of multiple insurers in a single product to fund a plan will help
alleviate plan sponsor and participant concerns about the long-term
viability of a single insurer.

c. Use of financial products, such as target date funds, that provide at a
predetermined participant age for a certain portion of contributions to
be used periodically (over 15 years or so) to purchase an annuity
benefit. While a participant will be aware of this later annuity
purchase when he first elects the target date fund as his investment
option and will at any time prior to the actual purchase of an annuity
benefit be able to opt out and avoid such a purchase, the periodic
annuity purchase will happen automatically until the participant
chooses another investment option.

Ladi hiddal

David J. Kolhioff, Senig/Zounsel