Senator Moves to Alter Pension Buyout Process

Murray noted a 2015 Government Accountability Office report, which found that companies were offering lump-sum buyouts to retirees without key information participants needed to make informed decisions. The Treasury Department at the time announced it would write new rules effectively ending these buyouts.

Last March, however, the Trump administration reversed course, and Murray pressed administration officials to justify the decision.

While pensions are covered by the Employee Retirement Income Security Act protections and are backed by the Pension Benefit Guaranty Corp., lump-sum payouts have no such protections, Murray said.

The legislation would require plan sponsors to provide participants and beneficiaries with a paper notice to affected participants and beneficiaries 90 days before the period in which they must make a decision.

"The required notice would include information that would allow people considering what's best for their financial futures to compare between benefits offered under the plan and the lump sum, and would explain how the lump sum was calculated, the ramifications of accepting a lump sum such as the loss of certain federal protections, details about the election period, where to follow up with questions, and other information," according to a summary of the bill.

The bill would also require a comparison of benefits, explanation of how the lump sum was calculated, ramifications of accepting a lump sum such as the loss of certain federal protections, details about the election period, and where to follow up with questions to be included in the notice.