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

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

INTV

Why broker-dealers are on a roll

Deputy editor Bob Hordt and senior columnist Bruce Kelly discuss last year's bounce-back for IBDs.

Latest news & opinion

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print