Voya 2014 Annual Report Download - page 119

to ERISA plans or IRAs would be deemed a fiduciary under ERISA or the Internal Revenue Code. Although the
DOL withdrew this proposal in the fourth quarter of 2011, it has announced in July of 2013 that it would re-
propose the regulation under the revised general topic of conflicts of interest under ERISA pertaining to
investment advice. The new proposed regulation is expected to be transmitted by the DOL to the Office of
Management and Budget for review during the first quarter of 2015 and published for public comment during the
second quarter of 2015. We cannot predict with any certainty what will be contained in the re-proposed
regulations or when the DOL would propose the new rule become final or effective, but they could alter the way
our products and services are marketed and sold to ERISA plans and their plan participants and to purchasers of
individual retirement accounts and individual retirement annuities. This could have a material impact on the level
and type of services we can provide as well as the nature and amount of compensation and fees we and our
advisors and employees may receive for investment-related services. In addition, the proposed regulations may
make it easier for the DOL in enforcement actions, and for plaintiffs’ attorneys in ERISA litigation, to attempt to
extend fiduciary status to advisors who would not be deemed fiduciaries under current regulations. See “Item 1.
Business—Regulation—Employee Retirement Income Security Act Considerations”.
Finally, the DOL has issued a number of regulations recently, and may issue additional similar regulations,
that increase the level of disclosure that must be provided to plan sponsors and participants. These ERISA
disclosure requirements will likely increase the regulatory and compliance burden upon us, resulting in increased
costs.
Changes in U.S. pension laws and regulations may affect our results of operations and our profitability.
Congress from time to time considers pension reform legislation that could decrease the attractiveness of
certain of our retirement products and services to retirement plan sponsors and administrators or have an
unfavorable effect on our ability to earn revenues from these products and services. In this regard, the Pension
Protection Act of 2006 made significant changes in employer pension funding obligations associated with
defined benefit pension plans that are likely to increase sponsors’ costs of maintaining these plans and imposed
certain requirements on defined contribution plans. Over time, these changes could negatively impact our sales of
defined benefit or defined contribution plan products and services and cause sponsors to discontinue existing
plans for which we provide insurance, asset management, administrative, or other services. Certain tax-favored
savings initiatives that have been proposed could hinder sales and persistency of our products and services that
support employment-based retirement plans.
The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 also includes
certain provisions for defined benefit pension plan funding relief. These provisions may impact the likelihood of
corporate plan sponsors terminating their plans and/or engaging in transactions to partially or fully transfer
pension obligations to an insurance company. As part of our retirement services segment, we offer general
account and separate account group annuity products that enable a plan sponsor to transfer these risks, often in
connection with the termination of defined benefit pension plans. Consequently, this legislation could indirectly
affect the mix of our business, with fewer closeouts and more non-guaranteed funding products, and adversely
impact our results of operations.
We may not be able to mitigate the reserve strain associated with Regulation XXX and NAIC Actuarial
Guideline 38, potentially resulting in a negative impact on our capital position or in a need to increase prices
and/or reduce sales of term or universal life products.
Regulation XXX requires insurers to establish additional statutory reserves for certain term life insurance
policies with long-term premium guarantees and for certain universal life policies with secondary guarantees. In
addition, AG38 clarifies the application of XXX with respect to certain universal life insurance policies with
secondary guarantees. Many of our newly issued term insurance products and an increasing number of our
universal life insurance products are affected by XXX and AG38, respectively. The application of both XXX and
AG38 involves numerous interpretations. At times, there may be differences of opinion between management
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