Lifetime Income Disclosure Act

To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure. 1. Short title This Act may be cited as the Lifetime Income Disclosure Act 2. Disclosure regarding lifetime income (a) In general Subparagraph (B) of section 105(a)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1025(a)(2) (1) in clause (i), by striking and (2) in clause (ii), by striking diversification. diversification, and (3) by inserting at the end the following: (iii) the lifetime income disclosure described in subparagraph (D)(i). In the case of pension benefit statements described in clause (i) of paragraph (1)(A), a lifetime income disclosure under clause (iii) of this subparagraph shall only be required to be included in one pension benefit statement during any one 12-month period. . (b) Lifetime income Paragraph (2) of section 105(a) of such Act (29 U.S.C. 1025(a)) is amended by adding at the end the following: (D) Lifetime income disclosure (i) In general (I) Disclosure A lifetime income disclosure shall set forth the lifetime income stream equivalent of the total benefits accrued with respect to the participant or beneficiary. (II) Lifetime income stream equivalent of the total benefits accrued For purposes of this subparagraph, the term lifetime income stream equivalent of the total benefits accrued (III) Lifetime income streams The lifetime income streams described in this subclause are a qualified joint and survivor annuity (as defined in section 205(d)), based on assumptions specified in rules prescribed by the Secretary, including the assumption that the participant or beneficiary has a spouse of equal age, and a single life annuity. Such lifetime income streams may have a term certain or other features to the extent permitted under rules prescribed by the Secretary. (ii) Model disclosure Not later than 1 year after the date of the enactment of the Lifetime Income Disclosure Act (I) explains that the lifetime income stream equivalent is only provided as an illustration; (II) explains that the actual payments under the lifetime income stream described in clause (i)(III) that may be purchased with the total benefits accrued will depend on numerous factors and may vary substantially from the lifetime income stream equivalent in the disclosures; (III) explains the assumptions upon which the lifetime income stream equivalent was determined; and (IV) provides such other similar explanations as the Secretary considers appropriate. (iii) Assumptions and rules Not later than 1 year after the date of the enactment of the Lifetime Income Disclosure Act (I) prescribe assumptions that administrators of individual account plans may use in converting total accrued benefits into lifetime income stream equivalents for purposes of this subparagraph, and (II) issue interim final rules under clause (i). In prescribing assumptions under subclause (I), the Secretary may prescribe a single set of specific assumptions (in which case the Secretary may issue tables or factors that facilitate such conversions), or ranges of permissible assumptions. To the extent that an accrued benefit is or may be invested in a lifetime income stream described in clause (i)(III), the assumptions prescribed under subclause (I) shall, to the extent appropriate, permit administrators of individual account plans to use the amounts payable under such lifetime income stream as a lifetime income stream equivalent. (iv) Limitation on liability No plan fiduciary, plan sponsor, or other person shall have any liability under this title solely by reason of the provision of lifetime income stream equivalents which are derived in accordance with the assumptions and rules described in clause (iii) and which include the explanations contained in the model lifetime income disclosure described in clause (ii). This clause shall apply without regard to whether the provision of such lifetime income stream equivalent is required by subparagraph (B)(iii). (v) Effective date The requirement in subparagraph (B)(iii) shall apply to pension benefit statements furnished more than 12 months after the latest of the issuance by the Secretary of— (I) interim final rules under clause (i); (II) the model disclosure under clause (ii); or (III) the assumptions under clause (iii). .

Summary: Lifetime Income Disclosure Act - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require the quarterly pension benefit statement furnished to a participant or beneficiary with the right to direct the investment of assets in his or her account under an individual account plan to include a lifetime income disclosure at least once during any 12-month period. Requires such lifetime income disclosure to set forth the lifetime income stream equivalent of the participant's or beneficiary's total benefits accrued. Defines a lifetime income stream equivalent of the total benefits accrued as the monthly annuity payment the participant or beneficiary would receive if those total accrued benefits were used to provide lifetime income streams to a qualified joint and survivor annuitant. Directs the Secretary of Labor to: (1) issue a model lifetime income disclosure, written in a manner which can be understood by the average plan participant; and (2) prescribe assumptions that plan administrators may use in converting total accrued benefits into lifetime income stream equivalents. Declares that no plan fiduciary, plan sponsor, or other person shall have any liability under ERISA solely by reason of the provision of lifetime income stream equivalents derived in accordance with such assumptions and related rules and including explanations contained in the model lifetime income disclosure.