IN THE SENATE OF THE UNITED STATES
May 21, 2019
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
To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure.
This Act may be cited as the
Lifetime Income Disclosure Act.
Disclosure regarding lifetime income
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—
in clause (i), by striking
and at the end;
in clause (ii), by striking
diversification. and inserting
diversification, and; and
by inserting at the end the following:
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.
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:
Lifetime income 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.
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.
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.
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—
explains that the lifetime income stream equivalent is only provided as an illustration;
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;
explains the assumptions upon which the lifetime income stream equivalent was determined; and
provides such other similar explanations as the Secretary considers appropriate.
Assumptions and rules
Not later than 1 year after the date of the enactment of the Lifetime Income Disclosure Act, the Secretary shall—
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
issue interim final rules under clause (i).
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).
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—
interim final rules under clause (i);
the model disclosure under clause (ii); or
the assumptions under clause (iii).