Taking a cue from the Department of Labor, a bipartisan group of senators introduced a bill Wednesday that would allow workers in retirement plans to receive an annual statement of how their lump-sum savings translate into a lifetime stream of monthly income.
The Lifetime Income Disclosure Act was introduced by Sens. Johnny Isakson, R-Ga., Christopher Murphy, D-Conn., Tim Scott, R-S.C., Bill Nelson, D-Fla. and Elizabeth Warren, D-Mass.
The companion bill, H.R. 2171, was previously introduced in the House by Reps. Rush Holt, D-N.J., Tom Petri, R-Wis., Ron Kind, D-Wis. and Dave Reichert, R-Wash.
In early May, DOL’s Employee Benefits Security Administration announced that it was seeking public input on a proposed rule on lifetime income illustrations given to participants in defined contribution plans, such as 401(k) and 403(b) plans.
“We are looking for the best ideas on how to show people what their lump-sum retirement savings look like when they are spread out over all the years of retirement,” said Phyllis Borzi, assistant secretary of Labor for EBSA.
The American Council of Life Insurers issued a statement saying that the “vital” lump-sum information “would make it easier for workers to understand how their savings will address their month-to-month living expenses.”
The legislation “represents a major step forward in helping workers address their retirement security needs,” ACLI said. “Taken together, the Lifetime Income Disclosure Act and the DOL draft proposal show there is tremendous momentum behind efforts to give retirement plan participants a leg up in their retirement planning.”
Check out DOL Seeks Input on Lifetime Income Illustrations Plan on AdvisorOne.