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.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1145 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1145
To amend the Employee Retirement Income Security Act of 1974 to require
a lifetime income disclosure.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 12, 2013
Mr. Isakson (for himself, Mr. Murphy, Ms. Warren, Mr. Scott, and Mr.
Nelson) 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 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 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).''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
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