S. 267: Bipartisan Bill Could Require Retirement Income Notices
February 8, 2011 by Arthur D. Postal
WASHINGTON BUREAU — A new Senate bill, S. 267, could require 401(k) plans to tell participants how much monthly retirement income their accounts might generate.
S. 267, the Lifetime Income Disclosure Act bill, was introduced by Sens. Jeff Bingaman, D-N.M., Johnny Isakson, R-Ga., and Herb Kohl, D-Wis.
If adopted as written, the bill would require sponsors of 401(k) plans and other private-sector defined contribution plans to inform participants about the lump-sum value of their retirement accounts.
Sponsors also would have to tell participants how much guaranteed monthly income a plan account might generate at retirement, based on the participant’s age at retirement and other factors.
The American Council of Life Insurers (ACLI), Washington, is supporting the bill.
“Most workers recognize the need to accumulate retirement assets, but many may not think about the need to manage their assets over the course of a retirement that could last 20 or 30 years,” the ACLI says. “Understanding what a lump sum of $100,000 really means in terms of paying the monthly bills will help countless workers in planning for retirement.”
The ACLI cites survey data indicating that many workers say they would save more for retirement if they knew they were saving too little to generate adequate retirement income.
In addition to the ACLI, sponsors have support from groups such as AARP, Washington, and the American Society of Pension Professionals & Actuaries, Arlington, Va.