Annuities Industry Worries Retirement Tax-Deferrals Are On Chopping Block
[Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.]
The threat to the tax deferred status of retirement vehicles, including annuities, has returned as a major concern for the Insured Retirement Institute as Congress prepares a new tax package to extend President Trump’s 2017 tax cuts. IRI lobbyists worry that lawmakers could once again target tax deferral as a revenue source. Tax deferral allows investors to grow assets in annuities, retirement plans and IRAs tax free until withdrawals are made. Paul Richman, the institute’s chief government and political affairs officer, said lawmakers may look to eliminate that benefit as they search for ways to fund tax cuts, echoing a proposal briefly floated by some Republicans in 2017 before Trump stepped in to oppose it.
Richman said the institute is actively meeting with lawmakers, many of whom are new, to reinforce the importance of tax deferral and annuities. IRI President and CEO Wayne Chopus said protecting tax deferral is a top legislative priority, noting that it has played a critical role in encouraging middle class workers to save for retirement. Chopus pointed to Trump’s earlier support, quoting the president’s view that tax deferral “has always been a great and popular middle class tax break that works.”
The institute is also continuing its fight against the Department of Labor’s new fiduciary rule. After successfully opposing the prior version vacated by a court in 2016, IRI has sued over the latest rule, which has been stayed while the Trump administration reviews it. Chopus said he is confident the rule should ultimately be vacated again. Looking ahead to 2025, the institute has outlined 33 policy proposals aimed at strengthening retirement security, including expanding access to annuities in 403(b) plans, removing barriers to guaranteed income options in default investments, and requiring most employers to offer workplace retirement plans.
Beyond tax and regulatory issues, IRI is pushing for broader adoption of guaranteed income solutions as more Americans near retirement. Richman noted that 51% of Americans worry more about running out of money than dying. Chopus said recent retirement legislation could further accelerate annuity adoption, adding that the industry has reason for optimism. In 2024, retail annuity sales rose 12% to a record $432.6 billion as more Americans recognize the value of guaranteed income.
For more information see Tracey Longo “Annuities Industry Worries Retirement Tax-Deferrals Are On Chopping Block,” Financial Advisor, April 1, 2025.