Across the country, retirement plan sponsors are in “wait and see mode” as the U.S. Department of Labor (DOL) works to rapidly rolling out proposed new regulations. Many of the efforts are intended to respond to the Setting Every Community Up for Retirement Enhancement (SECURE) Act passed by Congress in 2019.
As Bloomberg Law News reports, “The SECURE Act rewards employers for expanding retirement programs, gives account holders more time to grow their nest eggs, and makes it easier for unrelated businesses to pool their resources in group plans.”
Why Lifetime Retirement Income Disclosures?
Within the DOL, the Employee Benefits Security Administration (EBSA) has been particularly active rolling out proposals throughout the summer—catching up with efforts deferred when COVID-19 and stimulus work took priority.
One important focus of EBSA’s current efforts is lifetime retirement income disclosures. “ Our goal is to help workers and retirees understand how savings translate to retirement income,” said Acting Assistant Secretary of Labor for the Employee Benefits Security Administration Jeanne Klinefelter Wilson. “Defined contribution plan savings are meant to stretch across the years of retirement. When workers are reminded of what their balances could mean in terms of an estimated monthly dollar amount, they can use this information to plan both savings and spending.” Read more
Following federal protocol, the “interim final rule” issued by the Department of Labor on August 18, 2020 would take effect 12 months after it’s a publication in the Federal Register. The interim final rule includes a 60-day period for the submission of comments to improve the rule.
Plan sponsors can gear up for the proposed changes, using the Fact Sheet, including income illustrations, on EBSA’s website.
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