With the shift to 401(k) plans, American workers have become increasingly responsible for putting savings into and managing their retirement investments. However, studies have found that many Americans are not saving enough, and they are unsure how quickly or slowly to draw down their savings in their retirement years.
The Lifetime Income Disclosure Act, S.1574, introduced once again by Isakson and Murphy, would require 401(k) plan sponsors to inform participating workers of the projected monthly income they could expect at retirement based on their current account balance.
"We're working to ensure Americans have all the information they need to make informed decisions about their retirement investments early on, because the last thing they should have to worry about is running out of savings during their retirement years," said Isakson. "This information not only helps today's workers to plan ahead, but promotes increased savings while they are still in the work force. I'm proud to join
"Too many people in
The Lifetime Income Disclosure Act is patterned on the
By providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement.
Specifically, under the act, defined contribution plans subject to Employee Retirement Income Security Act of 1974 - including 401(k) plans - would be required annually to inform participants of how their account balance would translate into a monthly income stream based on age at retirement and other factors.
To ensure there is no material burden or potential liability on employers who voluntarily sponsor 401(k) plans, the legislation directs the
Companion legislation, H.R. 2367, was introduced in the
Isakson and Murphy previously introduced the legislation in 2015 and 2017.
Full text of the legislation is available here (https://www.isakson.senate.gov/public/_cache/files/d5d287dd-6cb9-46d1-a5f6-0534eb2779ff/05-21-19%20LIDA.pdf).