Legislation Introduced to Require Plans to Disclose Lifetime Income Annuity Equivalents

Bipartisan legislation was introduced in the Senate on June 12 that would require defined contribution plans to disclose annually to participants the lifetime income stream equivalent of the total benefits accrued. The Lifetime Income Disclosure Act (S. 1145) would require sponsors to illustrate the monthly annuity equivalents of their accrued benefits under a single-life annuity and a qualified joint and survivor annuity. Although the proposed legislation differs in a number of respects from the approach the U.S. Department of Labor (DOL) seems to be developing, it would provide protection from fiduciary liability as long as sponsors use the model notices and assumptions developed by the DOL.

The bill was sponsored by Senators Johnny Isakson (R-GA), Christopher Murphy (D-CT), Bill Nelson (D-FL), Tim Scott (R-SC), and Elizabeth Warren (D-MA). Similar legislation was recently introduced in the House (H.R. 2171) by Representatives Rush Holt (D-NJ), Ron Kind (D-WI), Tom Petri (R-WI), and Dave Reichert (R-WA).

For a copy of S. 1145, The Lifetime Income Disclosure Act, click here.
For a copy of H.R. 2171, click here.