S 267 ISCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

S. 267CommentsClose CommentsPermalink

To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATESCommentsClose CommentsPermalink

February 3, 2011CommentsClose CommentsPermalink

Mr. BINGAMAN (for himself, Mr. ISAKSON, and Mr. KOHL) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and PensionsCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Lifetime Income Disclosure Act’.CommentsClose CommentsPermalink

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--CommentsClose CommentsPermalink





(1) in clause (i), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(2) in clause (ii), by striking ‘diversification.’ and inserting ‘diversification, and’; andCommentsClose CommentsPermalink





(3) by inserting at the end the following:CommentsClose CommentsPermalink





‘(iii) the lifetime income disclosure described in subparagraph (D)(i).CommentsClose CommentsPermalink





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.’.CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





‘(D) LIFETIME INCOME DISCLOSURE-CommentsClose CommentsPermalink





‘(i) IN GENERAL-CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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--CommentsClose CommentsPermalink





‘(I) explains that the lifetime income stream equivalent is only provided as an illustration;CommentsClose CommentsPermalink





‘(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;CommentsClose CommentsPermalink





‘(III) explains the assumptions upon which the lifetime income stream equivalent was determined; andCommentsClose CommentsPermalink





‘(IV) provides such other similar explanations as the Secretary considers appropriate.CommentsClose CommentsPermalink





‘(iii) ASSUMPTIONS AND RULES- Not later than 1 year after the date of the enactment of the Lifetime Income Disclosure Act, the Secretary shall--CommentsClose CommentsPermalink





‘(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; andCommentsClose CommentsPermalink





‘(II) issue interim final rules under clause (i).CommentsClose CommentsPermalink





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.CommentsClose CommentsPermalink





‘(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).CommentsClose CommentsPermalink





‘(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--CommentsClose CommentsPermalink





‘(I) interim final rules under clause (i);CommentsClose CommentsPermalink





‘(II) the model disclosure under clause (ii); orCommentsClose CommentsPermalink





‘(III) the assumptions under clause (iii).’.CommentsClose CommentsPermalink