Senate, House introduce bills mandating lifetime income disclosures for 401(k) plans

The bills are similar to ones introduced in the previous Congress, but failed to pass committee

Apr 6, 2017 @ 5:29 pm

By Greg Iacurci

+ Zoom

Bipartisan legislation was introduced today in the Senate and House of Representatives that would require employers to provide 401(k) participants with a projection of monthly income at retirement, based on their current account balance.

Johnny Isakson, R-Ga., and Chris Murphy, D-Conn., introduced the Lifetime Income Disclosure Act, or S. 868, in the Senate. Luke Messer, R-Ind., and Mark Pocan, D-Wisc., introduced a companion measure in the House.

"American workers need access to the best available information about their investment choices and exactly how much they will have earned when they retire," Sen. Isakson said. "This information not only helps them to plan, but promotes increased savings while they are still working."

The new Senate and House measures are reintroductions of bills that had been put forth in the prior session of Congress (H.R. 2317 and S. 1317, respectively). Both bills didn't make it through committee.

The legislation builds on the federal government's push to frame Americans' thinking around retirement savings in terms of generating a retirement income stream, similar to that provided by a pension plan, rather than wealth accumulation.

A bill that unanimously passed the Senate Finance Committee late last year — the Retirement Enhancement and Savings Act — contained a similar provision calling for annual participant benefit statements to include income disclosures.

Department of Labor officials had also pursued a regulatory project for years, but Phyllis Borzi, assistant secretary of labor during the Obama administration, said last year the administration had run out of time before a new presidential administration swept into office.

The Treasury Department in 2014 also issued guidance approving use of 401(k) assets to purchase certain longevity annuities. That same year, it also issued guidance to encourage bundling of deferred income annuities into target-date funds.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Creating client events with a 'wow'

Financial adviser Ryan Furstenau has turned his passion for Dodge Vipers into new clients. Learn about his event and how it has helped him prospect in a small community.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

How does your advisory firm stack up?

Comparing a firm's pay to the competition can point out vast flaws.

10 signs your client is cheating on you

Sure signs that clients may be on the way out the door.

Morgan Stanley sees slower fee-based asset flows on fiduciary rule delay

Flows to advisory accounts, while still higher than the start of 2016, dropped off more than 20% from Q2 and were the lowest in a year.

How adviser salaries stack up to other jobs

Median compensation hovers just under $100,000 on the low end and reaches nearly $300,000 for bosses.

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print