DOL unveils interim final rule for Lifetime Income Illustrations
August 20, 2020
The Department of Labor has unveiled an interim final rule regarding lifetime income illustrations, part of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The interim final rule is expected to be published “soon” in the Federal Register. A 60-day public comment period will follow.
The DOL has produced a helpful fact sheet regarding the interim final rule. It can be accessed here.
The lifetime income illustration rule mandates that once per year, plan participant statements illustrate a participant’s total accrued benefit as two monthly “lifetime income streams.” The first illustration is to be based on a qualified joint and survivor annuity; the second, on a single life annuity. Note that the SECURE Act does not require that a plan actually provide an annuity option.
The income illustration requirements will become effective for benefit statements furnished more than 12 months following the publication of the interim final rule in the Federal Register. The interim final rule includes required actuarial assumptions, model disclosures, and relief from ERISA liability for sponsors and fiduciaries providing income illustrations that comply with the rule.
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