DOL Issues Rule on Lifetime Income Statements

"Our goal is to help workers and retirees understand how savings translate to retirement income," said Jeanne Klinefelter Wilson, acting head of EBSA. "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."

A senior department official said on a Tuesday morning call with reporters that "neither Secure nor the department rule requires participant to get their benefit as an annuity," and that neither require DC plans to offer an annuity option.

"This is a critical distinction because it doesn't force anyone to take retirement as a monthly annuity," the official said.

In an email on Tuesday, the Insured Retirement Institute, a trade group for the annuity industry, stated that Labor's rule "is designed to provide consumers with important information and perspective by illustrating retirement account balances as monthly income — much like a paycheck — and not only a lump sum. IRI research prior to the SECURE Act showed that consumers would not only welcome this information but would likely be encouraged to save more."

— Related on ThinkAdvisor:

• Americans Can't Translate Retirement Savings Into Future Income
• Amy Finkelstein's Deep Dive Into Annuities & Insurance