By David Pitt, AP Personal Finance Writer
DES MOINES, Iowa (AP) — What happens when the government considers tinkering with retirement accounts and asks for citizen input?
It gets plenty.
Government officials began seeking comments in February on a proposal to add an annuity option to retirement plans. Such an option would potentially turn a portion of a retiree's savings over to an insurance company in exchange for a monthly check.
Annuities reduce the chance retirees will outlive their savings. In addition, the risk of losing money if the stock market drops is minimized.
However, retirees lose the upside potential of the stock market, and the flexibility to spread out their investment portfolio, in exchange for a monthly check.
The departments of Labor and Treasury requested input on the annuity issue as they pondered solutions to a serious problem that plagues current savings plans — retirees running out of money.
The government expected the usual responses from insurance and investment industry groups, but not hundreds of letters and e-mail from workers and retirees.
"KEEP YOUR SLIMEY HANDS OFF MY MONEY," says one letter.
By the May 3 deadline, 700 responses were received, far more than usual.
"The (proposal) was not even out on the street for an hour and we started getting these comments," said Phyllis Borzi, the assistant secretary of Labor in charge of employee benefits. "I don't think anybody here has ever had anything quite like this."
By comparison, a recent request for comments on retirement account investment advice rules attracted just 24 letters.
The Center for Retirement Research at Boston College estimated in an October study that nearly half of U.S. households will not have enough income to maintain a preretirement standard of living, even if they work to age 65.