- MetLife

1095 Avenue of the Americas, MSC 39.822
New York, NY 10036-6796

Tel 212-578-0663

Fax 212-578-0558

rsollmann@metlife.com

Robert E. Sollmann, Jr.

Executive Vice President
Retirement Products

August 12, 2010

Office of Regulations and Interpretations
Employee Benefits Security Administration

Attn: Lifetime Income Joint Hearing, Room N-5655
U.S. Department of Labor

200 Constitution Ave., NW

Washington, DC 20210

CC:PA:LPD:PR (REG-148681-09)
Room 5205

Internal Revenue Service

P.O. Box 7604

Ben Franklin Station

Washington DC 20044

Re: Request to Testify at Hearings on Lifetime Income Options

To Whom It May Concern:

MetLife respectfully requests the opportunity to testify before the Department of Labor (DOL) and
the Department of Treasury (the “Agencies”) about the issues relating to lifetime income solutions
that are designed to provide a guaranteed lifetime stream of income after retirement for
participants and beneficiaries in retirement plans.

We would like to commend the Agencies for holding this joint hearing and we would very much
appreciate the opportunity to share our thoughts and experiences with you relative to this critical
topic.

We request the opportunity to provide testimony on the following issues identified by the
Agencies in the hearing announcement. The majority of our allotted time will be spent on the first
two topics.

Topic 1: Information to Help Participants Make Choices Regarding Management and
Spend Down of Retirement Benefits (Four Minutes)

We would like the opportunity to discuss the particular type of information that is necessary to
help participants make choices regarding the management and spend down of retirement
benefits.

The DOL has done excellent work in setting forth guidance for plan sponsors on providing
education and advice without giving rise to fiduciary liability for providing investment advice.


Re: Request to Testify at Hearings on Lifetime Income Options

The DOL, in issuing the SunAmerica Advisory Opinion, has led to a great expansion of advice
based on computer models using generally accepted investment theories. Much of this computer
model advice is provided through managed accounts, where the advice is implemented
automatically and thus is more effective than advice that participants must implement on their
own. The DOL has an opportunity to build on the important success that it has achieved in the
savings phase by applying the same framework to the distribution phase.

MetLife recommends four additional steps that can be taken with respect to participant education
and advice. The first two relate to Interpretive Bulletin 96-1 (IB 96-1) and the second two relate to
guidance with respect to advice provided through computer models.

1. Guidance is needed to clarify what education may be provided to participants about the
distribution phase without that guidance being treated as investment advice leading to
fiduciary liability.

2. The current investment elements of IB 96-1 should be expanded to clarify that education
regarding investment in in-plan accumulation annuities and guaranteed insurance
products is not investment advice.

3. The DOL should issue “SunAmerica-like” guidance with respect to the distribution phase.
In other words, a financial institution would be allowed to contract with an independent
expert that would develop and apply a computer model for providing distribution advice
based on generally accepted decumulation principles.

4. The final step for the DOL to take is to incorporate in-plan accumulation annuities and
guaranteed insurance products into the SunAmerica and Pension Protection Act
computer models.

MetLife recommends that the Agencies provide enhanced education to plan sponsors about their
ability to offer partial annuitization to participants and the benefits that it can provide. We further
recommend exploration of proposals to encourage such plan designs. Offering partial
annuitization is critical to the success of creating guaranteed income in retirement. Our
experience indicates that, when participants have the opportunity to partially annuitize their
account balances, they do so in greater numbers than when total annuitization is their only option.

We also would like to discuss proposals that would encourage in-plan accumulation annuities,
such as the incorporation of such annuities into target date funds. Such annuities are critical to
the successful development of annuitization within plans. Most importantly, such annuities
provide participants with a means to spread purchase payments over time at different interest
rates, thus avoiding the risk of purchasing a large annuity at retirement when interest rates may
be low. In addition, these annuities allow participants to make purchase payments in small
increments; participants who might be intimidated by a large annuity purchase at retirement may
be more comfortable buying small pieces of an annuity over time. Finally, buying annuities over
time will help participants think in terms of income, not assets, which is critical to obtaining true
retirement security.

To, Disclosure of Account Balances as Monthly Income Streams (One Minute)
MetLife believes that 401(k) plan account balances should be communicated in terms of the
lifetime income they represent, in addition to the total account balance, on an annual benefit
statement. Educational tools like this, which seek to shift the focus from accumulation to income,
can help individuals better evaluate the adequacy of their savings by framing their account
balance in terms of retirement income.


Re: Request to Testify at Hearings on Lifetime Income Options

Topi Fiduciary Safe Harbor for Selection of Lifetime Income Issuer or Product (One

Finally, we would like to state how important it will be for the DOL to resolve the fiduciary
concerns that plan sponsors have. Plan sponsors have indicated to us that their decisions to
allow annuitization in their plans will turn on this issue. MetLife stands ready to assist you in any
way possible as it relates to this very important issue.

MetLife would like to again thank you for holding this hearing. As a society, we — including the
government, employers, and the financial services industry — collectively have a role in providing
the education and tools to participants so that their efforts to save for their retirement are
rewarded with retirement security.

If you have any questions or need additional information regarding our request to testify, please
feel free to contact me at (212) 578-0663.

Sincerely,

Robert E. Sollmann, Jr.
Executive Vice President
Retirement Products