In Advisory Opinion 202504A, the Department of Labor’s DOL’s Employee Benefits Security Administration (EBSA) approved a lifetime income structure involving a variable annuity. The advisory opinion, issued on Sept. 23, involved a lifetime income strategy (LIS) offered by AllianceBernstein that approved a request by AllianceBerstein that their LIS program qualifies as a qualified default investment alternative (QDIA) under ERISA.

The LIS integrates a guaranteed lifetime withdrawal benefit within a variable annuity contract. The advisory opinion found that the LIS is not disqualified from QDIA status provided that the program meets all other regulatory requirements (e.g., participant notification and transferability rules).

Prospects: Advisory opinions provide clarity as to the agency’s current thinking, but do not constitute a law or rule on which others may rely. But this advisory opinion tracks with President Trump’s Executive Order (EO) 14330 which requires DOL to take a new look at fiduciary duty requirements in the context of alternative asset investments in retirement plans. It comes after DOL rescinded its prior guidance that discouraged fiduciaries from considering alternative investments (including annuities) in 401(k) (and other defined contribution) investment menus.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.