Title: Lifetime Income Disclosure Act
Policy area: Labor and Employment

Summary:
Lifetime Income Disclosure Act
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to require pension benefit statements to include a lifetime income disclosure at least once during any 12-month period.
The disclosure must set forth the lifetime income stream equivalent of the total benefits accrued with respect to the participant or beneficiary. The "lifetime income stream equivalent of the total benefits accrued" is the amount of monthly payments the participant or beneficiary would receive if the total accrued benefits were used to provide lifetime income streams based on certain assumptions, including that the participant or beneficiary has a spouse of equal age and a single life annuity.
The Department of Labor must issue a model lifetime income disclosure, assumptions that plan administrators may use in converting total accrued benefits into lifetime income stream equivalents, and related rules.
No plan fiduciary, sponsor, or other person may be liable under ERISA solely due to the provision of lifetime income stream equivalents derived in accordance with the assumptions and related rules issued by Labor, including explanations contained in the model lifetime income disclosure.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 868 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 868

To amend the Employee Retirement Income Security Act of 1974 to require 
                     a lifetime income disclosure.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                April 6 (legislative day, April 4), 2017

Mr. Isakson (for himself and Mr. Murphy) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Employee Retirement Income Security Act of 1974 to require 
                     a lifetime income disclosure.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Lifetime Income Disclosure Act''.

SEC. 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)) 
is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii), by striking ``diversification.'' and 
        inserting ``diversification, and''; 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 be required to be included in only 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 new 
subparagraph:
                    ``(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' means the amount of monthly 
                                payments the participant or beneficiary 
                                would receive if the total accrued 
                                benefits of such participant or 
                                beneficiary were used to provide 
                                lifetime income streams described in 
                                subclause (III), based on assumptions 
                                specified in rules prescribed by the 
                                Secretary.
                                    ``(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, the Secretary 
                        shall issue a model lifetime income disclosure, 
                        written in a manner so as to be understood by 
                        the average plan participant, that--
                                    ``(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, the 
                        Secretary shall--
                                    ``(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).''.
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