Regulatory Updates

Interim Final Rule Published for Lifetime Income Projections

September 18, 2020 – Published in today’s Federal Register is a Department of Labor Employee Benefits Security Administration (EBSA) interim final rule (IFR) to guide defined contribution retirement plans that must begin to furnish projections of potential lifetime income streams to participants. A pre-publication version of this guidance was issued by EBSA on August 18, 2020.

Lifetime income projections are required under provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which mandates that a participant’s accrued benefit must periodically be reflected on their benefit statements as an estimated lifetime income payment stream.

Plan administrators of covered plans must express a participant’s current account balance both as a single life annuity, and a qualified joint and survivor annuity income stream. As noted by EBSA, these projections—which are required to be on the same benefit statement—“will help participants better understand how the amount of money they have saved so far converts into an estimated monthly payment for the rest of their lives, and how this impacts their retirement planning.”

This IFR is effective September 18, 2021, and will apply to benefit statements furnished to participants after that date.  Written comments on the interim final rule must be received by EBSA no later than November 17, 2020.