May 7, 2013 (PLANSPONSOR.com) – The U.S. Department of Labor (DOL) is seeking comments about rules for lifetime income illustrations provided to defined contribution (DC) plan participants.
An advance notice of proposed rulemaking from the DOL's Employee Benefits Security Administration (EBSA) will focus specifically on lifetime income illustrations given to participants in defined contribution pension plans such as 401(k) and 403(b) plans. The purpose of the notice is to provide an opportunity for stakeholders to provide early input into the development of regulations.
“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 Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “Retirees run the risk of outliving their savings. If workers have the benefit of seeing how long their savings could last, it might spur better planning for the future, such as adopting more effective savings strategies.”
The DOL/EBSA is developing proposed regulations regarding the pension benefit statement requirements under Section 105 of the Employee Retirement Income Security Act of 1974 (ERISA). The notice solicits input about a rule that would require a participant’s accrued benefits to be included on his or her pension benefit statement as an estimated lifetime stream of payments, in addition to an account balance. DOL/EBSA is also requesting comments about a rule that would require a participant’s accrued benefits to be projected to his or her retirement date, assuming annual contributions and an estimated rate of return, and then presented as an estimated lifetime stream of payments.
Comments on the notice may be addressed to the U.S. Department of Labor, Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, 200 Constitution Ave. NW, Washington, DC 20210, Attn: Pension Benefits Statement Project. Comments may also be submitted by email to E-ORI@dol.gov with RIN 1210-AB20 in the subject line of the message or through the federal e-rulemaking portal at http://www.regulations.gov. All comments are due by July 8, 2013.
The notice, which will be published in the Federal Register on May 8, can be viewed here.